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Effects of Firms’ Resource Allocation on Consumer Evaluations

  • Journal of Regional Studies and Development
  • Abbr : JRSD
  • 2020, 29(3), pp.19-44
  • DOI : 10.22739/ipaid.2020.29.3.19
  • Publisher : Institute for Poverty Alleviation and International Development: IPAID
  • Research Area : Social Science > Area Studies > Regional Studies in general > Comparative / Statistical Regional Studies
  • Received : October 26, 2020
  • Accepted : December 14, 2020
  • Published : December 30, 2020

Jongwon Kim 1 SANG DO OH 2 Jeon, Eunmi 3 KIM, HAK KYUN 1

1성균관대학교
2연세대학교
3

Accredited

ABSTRACT

Trade-offs, whereby resources allocated to one goal cause opportunity costs and constrain other goals, can affect consumers' everyday decisions. The current research suggests that as individuals differs in terms of the perceived possibility of change and improvement of the self, firms may encounter different situations as a result of their CSR activities. Specifically, this research shows that CSR activities can generate an unintended negative outcome when consumers are sensitive to trade-offs and suspicious of the possibility of both economic growth and social responsibilities, akin to entity theorists. Generally, available resources and budgets corporations have are limited, so an expenditure on a particular field means a loss of investment opportunities in other fields. Thus, we show that when consumers are primed with the concept of trade-offs, they evaluate products of the corporation as inferior and less innovative although they tend to have positive attitudes toward the corporation. Our findings demonstrate that an unintended negative outcome of CSR activities may emerge. Although CSR activities have a positive impact on corporations' reputation, consumers may think that CSR activities mean a loss of the product quality. Therefore, the current research suggests that corporations should be cautious and careful in CSR activities especially when their products are very technology-intensive or require huge investment.

Citation status

* References for papers published after 2023 are currently being built.

This paper was written with support from the National Research Foundation of Korea.