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Authors

YongHee Kim

Abstract

An increasing number of studies have examined the effects of corporate social responsibility (CSR) activities on corporate financial performance (CFP) in the service industry. However, the extant literature does not provide comprehensive insights into the conditions on which the CSR–CFP link relies. In this study, firms’ marketing communication capability (MCC) is introduced as an important contingency variable, which determines the effects of CSR on the corporate financial performance, in the context of restaurant businesses. Multiple year data on the spending of public restaurant chains on different media are collected, and MCC is subsequently measured using the data envelope analysis. Then, a test is conducted to prove whether MCC moderates the relationship between CSR and firm financial performance. The empirical results support the hypothesis that MCC strengthens the effect of CSR on CFP. Through the findings, this research provides several interesting and important implications to the literature and managers of service firms.

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