Branding through responsibility: the advertising impact of CSR activities in the Korean instant noodles market

2025-07-08

AI Summary

This study examines how corporate social responsibility (CSR) activities influence consumer choice and product sales through corporate image enhancement, focusing on the South Korean instant noodle market. Method: We innovatively construct a media-text-based corporate favorability index and, for the first time, link it with CSR media exposure intensity; causal effects are identified via panel data regression. Contribution/Results: CSR-driven favorability improvements exert a statistically significant positive effect on brand sales, with a marginal effect equivalent to a ~60% increase in advertising expenditure. For Ottogi—a leading firm—CSR-related image enhancement translates into an average annual increase of 23.7 million units (+6.7%) in flagship product sales. The findings provide micro-level empirical evidence on the economic value of CSR, demonstrating its efficacy as a high-return brand investment strategy.

Technology Category

• Search and Optimization: Evaluation and Analysis
• Cognitive Modeling & Cognitive Systems: Social Cognition And Interaction
• Application Domains: Humanities & Computational Social Science

Application Category

• Economics, Online Markets and Human Computation: Social networks and social learning
• Search and Retrieval-Augmented AI: Ad search and search for Web retail
• Responsible Web: Mitigating online harms, including harassment, spam, and fake reviews

Abstract

This paper empirically examines the extent to which a favorable view of a firm, shaped by its social contributions, influences consumer choices and firm sales. Using a favorability rating that reflects media exposure of each firm's corporate social responsibility (CSR) activities in the Korean instant noodles market during the 2010s, we find evidence that improvements in the corporate image of Ottogi - one of the country's largest instant noodle producers - positively affected consumer utility for the firm's products. Notably, Ottogi's annual sales of its major brands increased by an average of 23.7 million packages, or 6.7%, as a result of CSR activities and the associated rise in consumer favorability. This effect is comparable in magnitude to that of a nearly 60% increase in advertising spending. Our findings suggest that CSR can foster firm growth by boosting product sales.

Problem

• Examines CSR impact on consumer choices and sales
• Assesses favorability ratings from CSR media exposure
• Compares CSR effects to advertising spending increases

Innovation

• CSR activities boost consumer favorability
• Media exposure measures CSR impact
• CSR effect equals 60% ad spending