Advertising Spending, Firm Performance, and the Moderating Impact of CSR

This article investigates the potential of corporate social responsibility (CSR) to influence the link between advertising spending and firm performance. Drawing upon the literature of CSR, we hypothesize that CSR positively moderates the relationship between advertising spending and firm performance. We focus on two types of firm performance: sales and firm value. Using two samples from both the hotel and restaurant industries, we found that firms with higher levels of CSR enjoy higher returns on advertising spending than firms with lower levels of CSR. We discuss the theoretical and managerial implications of these findings and provide direction for future research.