Does Corporate Image Mediate the Link between Corporate Social Responsibility and Performance? Evidence from Kenyan Listed Firms

Abstract

The purpose of this study was to empirically investigate whether corporate image mediates the relationship between corporate social responsibility and firm performance. To test the hypothesis, cross-sectional dataset gathered using a questionnaire from 61 listed firms at the Nairobi Securities Exchange was employed. CSR, corporate image and FP were operationalized using composite indices generated by aggregate mean of their respective indicators. These indicators were adopted from the prior empirical works. CSR was measured using community, environmental, supplier, employee, investors and customer dimensions while corporate image indicators comprised of product quality,  vision and leadership, emotional appeal and innovation. FP was proxied by non-financial metrics such as customer satisfaction, internal business processes and customer satisfaction. The estimation technique adopted in this study was structural equation model. Empirical findings indicated that the link between corporate social responsibility and firm performance was not direct; the effect of CSR on FP was transmitted via corporate image.

Keywords: corporate social responsibility, corporate image, firm performance, structural equation model