J Bus Ethics (2019) 154:701–719
https://doi.org/10.1007/s10551-017-3438-1
ORIGINAL PAPER
The Effects of Corporate Social Responsibility on Customer
Loyalty: The Mediating Effect of Reputation in Cooperative
Banks Versus Commercial Banks in the Basque Country
Izaskun Agirre Aramburu1,2 • Irune Gómez Pescador3
Received: 12 April 2016 / Accepted: 4 January 2017 / Published online: 17 January 2017
 Springer Science+Business Media Dordrecht 2017
Abstract The marketplace has seen significant growth in
the demand for ‘ethical’ behavior, and banks are seeking to
leverage customers’ perception in order to build a sustain-
able competitive advantage. In consequence, the concepts of
corporate social responsibility and corporate reputation are
of vital concern for academics and managers in terms of their
potential impact on customers. This study seeks to contribute
to the literature by examining the mediating role of corporate
reputation on the relationship between perceived corporate
social responsibility (conceptualized as a formative second-
order formative construct) and customer loyalty. The study
also takes into consideration the role played by bank type in
the mediation effect. To achieve this aim, a study was per-
formed comprising 572 personal surveys in the Basque
Country. The results showed that corporate reputation par-
tially mediated the relation between corporate social
responsibility and customer loyalty. On the other hand, bank
type is shown not to moderate the mediation effect. The
results have important implications for practitioners wishing
to manage their relations with customers.
Keywords Perceived CSR
Reputation
Loyalty

Cooperatives
Mediation
Moderation
Second-order
model
& Izaskun Agirre Aramburu
iagirrea@mondragon.edu
Irune Gómez Pescador
igomez@mondragon.edu
1
Faculty of Business Studies, Mondragon Unibertsitatea,
Oñati, Spain
2
Mondragon Innovation and Knowledge (MIK), Oñati, Spain
3
Faculty of Engineering, Mondragon Unibertsitatea, Arrasate,
Spain
Introduction
Corporate social responsibility (CSR) has gained momen-
tum as a new concept related to the social impact of
business enterprises and has become a popular notion
among stakeholders such as managers, creditors, investors,
suppliers, customer, employees and policymakers (Merve
et al. 2015).
Firms are expected to behave in a socially responsible
manner while at the same time generating value for
investors. The recent financial crisis has shown that over-
focusing on financial results while disregarding other
aspects of business can lead to failure. Banks have
attempted to recoup their damaged reputation and restore
the trust of others by implementing socially responsible
principles, incorporating the CSR concept into their
strategies (Argandoña 2009). CSR therefore involves
striking a balance between the financial and non-financial
goals of corporations, while acting in the best interests of
society as a whole.
CSR is an essential component of business practice
(Porter et al. 2007). Today, the field of CSR embraces a
broad range of different theories and a proliferation of
complex and unclear approaches. Garriga and Melé (2004)
help clarify the situation by classifying CSR theories into
four groups. These are: (a) instrumental theories, in which
the corporation is seen solely as an instrument for wealth
creation and its social activities only as a means for
achieving economic results; (b) political theories, which
concern themselves with the power of corporations in
society and a responsible use of this power in the political
arena; (c) integrative theories, in which the corporation
focuses on satisfying social demands; and (d) ethical the-
ories, based on the corporations’ ethical responsibilities to
society.
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This study adopts ethical theories, defining CSR as the
responsibility of enterprises for their impact on society
(Commission of the European Communities 2011). In
particular, CSR involves a triple bottom line, a framework
that includes economic, social and environmental aspects
of the business (Bigné et al. 2005; Garriga and Melé 2004;
Mercadé et al. 2014; Panwar et al. 2006). The aim of social
responsibility and ethical principles in commercial banking
is to align profitable business ventures with the needs of
society and thereby contribute to a more sustainable world,
following the recommendations of the World Business
Council for Sustainable Development (WBCSD).
Given the specific characteristics of the banking busi-
ness, consumers’ perception of activities in the area of
social responsibility is an important field of marketing
research for companies investing in such activities (Has-
san et al. 2013; Marı́n et al. 2009). Many scholars regard
firms’ social performance as an important element that
shapes the perceptions of different stakeholders and
guides their behaviors. Empirical evidence has shown
that, CSR, reflecting a firm’s activities and status relative
to its societal and stakeholder obligation (Sen and Bhat-
tacharya 2001), is a major component of social perfor-
mance, which has significant impacts on major
stakeholder outcomes such as customer trust, loyalty,
word of mouth, purchase intention (Lacey and Kennett-
Hensel 2010) and employee satisfaction (Valentine and
Fleischman 2008).
At the same time, previous research has shown that CSR
may in fact be an indirect factor for predicting different
customer outcomes and may therefore influence these
outcomes through more proximal factors such as brand
equity (Lai et al. 2010), organizational identification
(Greening and Turban 2000), corporate image (Turban and
Greening 1997) and corporate reputation (CR) (Neville
et al. 2005). Among these factors, CR has been suggested
as an important mechanism that establishes the link
between CSR and different stakeholder outcomes (Agarwal
et al. 2015)
Stanaland et al. (2011) find that perceived CSR signifi-
cantly influences perceptions of CR and enhances a firm’s
legitimacy in the eyes of its consumers. Arikan et al. (2014)
suggest that prospective customers are more likely to
consume the products of firms that engage in CSR activi-
ties, since they assign a good reputation to these firms.
In an effort to advance research on the customer out-
comes of CSR in the banking industry, this study expands
on the work of Stanaland et al. (2011) by asking: ‘‘Does
reputation fully mediate customers’ perception of CSR and
customer loyalty?’’ and ‘‘Does this mediation occur equally
in all types of financial organization?’’ This study seeks to
fill a gap in the literature by assessing customer response to
CSR as mediated by CR.
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I. A. Aramburu, I. G. Pescador
This is important for two key reasons. First, the intuitive
importance of CSR to society is rarely questioned, but the
need to justify CSR investments and understand its benefits
to customers and other stakeholders remains an important
and still largely unresolved issue (Lacey et al. 2015). CSR
has a multiplicative effect on business. That is, it is argued
that CRS offers a number of business benefits, namely
financial outcomes (Allouche and Laroche 2005; Miras
et al. 2011; Orlitzky et al. 2003; Wu 2006), reputation
(Brammer and Pavelin 2006; Melo and Garrido-Morgado
2012), customer satisfaction (Alafi and Hasoneh 2012) and
loyalty (Ellen et al. 2006; Kang 2014; Sen and Bhat-
tacharya 2001; Stanaland et al. 2011). However, direct
financial benefits are still of interest for CSR research
(Oeyono et al. 2011; Orlitzky et al. 2003). By exploring
additional benefit empirically, the authors not only offer
some verification of many of the predicted outcomes of
engaging in CSR, but also test whether the relation
between CSR and customer-related outcomes is more dis-
tant, by including a mediation test. Second, the study
explores the conditions under which financial firms can
improve customer loyalty. Drawing on various theoretical
bases, it is argued that in firms that form part of the social
economy—i.e., credit cooperatives—reputation will have
less of a mediating influence on the relationship between
corporate social responsibility and loyalty.
The authors’ research advances understanding of CSR
and the relation between CSR and customer-related out-
comes in the banking sector. First, CSR is viewed as a
formative construct because each dimension is considered
to have the potential to be mutually exclusive in such a way
that the effects of each dimension on customer loyalty can
be different (Burke et al. 2003). This idea is supported by
previous scholars who have demonstrated that certain
dimensions of CSR might inversely correlate with others
(Singh et al. 2008). Secondly, the authors respond to calls
from several scholars to study mediating mechanisms
between CSR and performance given the relative paucity
of the research currently available; this study therefore
explores the factor that might explain whether and when
financial firms may survive and grow, building a loyal
customer base, through the use of CSR. Thirdly, one of the
most important predicted benefits of CSR is addressed,
namely CR. Scholars of reputations from a variety of dis-
ciplines (management, economics, sociological and mar-
keting) have created multiple definitions of reputation
(Pfarrer et al. 2010). All disciplines coincide on two con-
ceptual points: (a) that the term reputation refers to social
cognitions, such as knowledge, impressions, perceptions
and beliefs and (b) that these social cognitions lie in the
minds of external observers. CR is defined as the collective
and cumulative representation of a firm’s actions that sig-
nals the firm’s ability to generate outcomes of value to
The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of…
multiple stakeholders (Fombrun and Van Riel 1997). The
reason for doing this is because CR plays an essential role
in the banking sector, given the intangibility of the service
(Walsh and Beatty 2007). Retail banks view CSR activities
as part of their strategic decision to improve their public
image (McDonald and Lai 2011) and customer-related
outcomes (Bhattacharya and Sen 2004). However, it is not
clear which CSR activities are likely to build positive
stakeholder responses (Chomvilailuk and Butcher 2013).
Lastly, customers may fail to perceive a firm’s CSR
activities, leading to undesirable outcomes. Corporate
managers engaging in CSR may question whether business
ethics is an oxymoron, and even believe that business and
ethics cannot coexist. Addressing this conflict requires a
clear understanding of the mechanism underlying CSR
activities. In addition, according to Bhattacharya, et al.
(2009) investigating the consequences of CSR perceptions,
organization type plays a crucial role that remains rela-
tively unexplored. In this regard, this study shows how the
type of organization might influence the action of CR as a
variable that channels CSR in customer loyalty. This is
important for cooperative companies, given that their
social nature, their commitment to the development of
society and the inclusion of stakeholders in their manage-
ment, may be a reference for integrating CSR and gaining
an advantage over other organizations in the banking
sector.
The remainder of this paper is structured as follows.
Firstly, the theoretical background for the work is pre-
sented and the authors’ hypotheses set out. Then, using
survey data, an empirical test of the theoretical model is
presented using a structural equation modeling approach. A
discussion of these results and their theoretical and man-
agerial implications follows. The study concludes by dis-
cussing limitations and suggestions for future research.
Literature Review and Hypotheses
Corporate Social Responsibility and Banks
Interest in CSR and sustainable development has grown in
recent years (Gallardo-Vázquez et al. 2013).
The proliferation of standards, tools and international
initiatives for the implementation of CSR and the large
amounts invested in CSR resources by the private and
public sector also demonstrate the importance given to the
concept (Bessire and Mazuyer,2012; Sheehy 2015).
The World Business Council for Sustainable Develop-
ment (WBCSD) defines CSR as the commitment of busi-
ness to contribute to sustainable economic development
working with employees, their families, the local commu-
nity and society to improve their quality of life, in ways
703
that are both good for business and good for development.
Kotler and Lee (2005) defined CSR as a commitment to
improve societal well-being through discretionary business
practices and contributions of corporate resources. From
the approach of sustainable development, CSR is defined as
a context-specific, strategic, proactive and synergistic phi-
losophy of doing business whereby corporations need to
pay attention to economic, environmental and social issues
in a balanced way (Panwar et al. 2006). This is an ethical
theory aimed at achieving human development and taking
present and future generations into consideration (Garriga
and Melé 2004). Thus, CSR forms the triple bottom line of
organizations, covering the full range of business concerns
related to environmental, economic and social dimensions.
The economic aspect of CSR mainly focuses on economic
performance; however, it also relates to an organization’s
involvement in community development or providing
socially responsible products. The social aspect of CSR
involves observation of elements such as a code of ethics
and compliance therewith, protection of human rights and
involvement in philanthropic activities. In this study, the
relevance of the environmental dimension in this perspec-
tive has been maintained, considering environmental policy
and level of financing of socially responsible projects to
form part of this dimension in the banking industry.
However, many other researchers (Garcia de los Salmones
et al. 2005; Pérez and Rodrı́guez del Bosque 2013) do not
view the environment as a separate dimension of CRS,
including it instead in the social dimension. The conception
of CSR established by the triple bottom line is largely
popular, current and accepted (González-Rodrı́guez et al.
2015), as evidenced by the variety of scholars using this
definition in their studies (Alvarado 2008; Martinez et al.
2014; Pérez and Rodrı́guez del Bosque 2015; Van Mar-
rewijik 2003; Wang and Juslin 2012). Lastly, it has been
argued that CSR is a multi-dimensional construct (Gal-
breath and Shum 2012; Jamali 2008), and triple-bottom-
line conceptualization addresses such dimensions.
However, legitimacy theory has long been a conceptual
foundation for researchers in understanding CSR and per-
ceived CSR (Stanaland et al. 2011). Legitimacy is defined
as a generalized perception or assumption that an organi-
zation’s actions are desirable, proper or appropriate within
some socially constructed system of norms, values and
beliefs (Suchman 1995). It is thus evident that by engaging
in CSR, companies are attempting to gain a greater degree
of legitimacy in the eyes of stakeholders (Pérez and
Rodrı́guez del Bosque 2013). In this regard, particular
attention has been paid to customers, since their opinions
are considered to directly influence the design and effec-
tiveness of corporate strategies (Selvi et al. 2010). Thus,
perceived CSR is the combination of customer perceptions
of economics, environmental and corporate social
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endeavors (Bigné et al. 2005; Pérez and Rodrı́guez del
Bosque 2013).
In today’s scenario, CSR has become a well-established
notion in the financial services industry due to its huge
impact on society (Scholtens 2009). Banks are increasing
CSR spending (Marı́n et al. 2009) and implementing CSR
at a practical level with initiatives such as financial inclu-
sion (Decker 2004), microcredit schemes for the deprived
(Hermes et al. 2005) and socially responsible banking
(Scholtens 2009). The banking sector has implemented
significant changes in recent years and has become one of
the leading proactive investors in CSR activities worldwide
(Marı́n et al. 2009; Pérez and Rodrı́guez del Bosque 2012),
and the reputations of financial institutions rely on their
socially responsible programs (Poolthong and Mandha-
chitara 2009), whereas other industries operate reactively,
in answer to external stakeholder pressure (Decker 2004).
In this regard, the banking system plays an important role
in economic development (Beck et al. 2010; Levine 2005;
Shen and Lee 2005), because its security and soundness
create several external benefits for society. Generally, for
economic growth, bank services operate as financial
intermediaries by facilitating cash flow between lenders
and borrowers. Moreover, because they use considerable
resources from society, banks are required to provide
feedback to the community more often than other indus-
tries (Meng-Wen and Chung-Hua 2013). Scholtens (2009)
mentions that in member countries of the Organization for
Economic Cooperation Development (OECD), specialized
banks offer saving accounts to the public while promising
that the money will be used to finance so-called community
investments in the environment. Likewise, in most coun-
tries, banks are involved in economic activities aimed at
promoting sustainable development (Meng-Wen and
Chung-Hua 2013).
CSR, Loyalty Outcome
CSR is a fundamental part of corporate marketing strate-
gies (Marı́n and Ruiz 2007), and loyalty is considered as a
vital objective for a firm’s survival and growth; building a
loyal customer base has become an important basis for
developing a sustainable competitive advantage (Kotler
and Amstrong 2008). Loyalty behavior is one of the most
representative ways in which consumers express their sat-
isfaction with corporate performance, and it is closely
linked to companies’ profitability (Garcia de los Salmones
et al. 2009). Matute et al. (2011) argue that in a world in
which customer confidence in the bank industry has been
bruised in recent years, finding solutions to rebuild trust
and maintain customer loyalty is critical not only for
managers in the banking sector, but also for strategic
management and marketing research. Customer loyalty is
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I. A. Aramburu, I. G. Pescador
predicted on the customer’s attitude and behavioral inten-
tions toward the service offered and repeat purchasing
behavior (Day 1969; Pritchard et al. 1999). A composite
approach to loyalty measurement involves an integration of
both attitudinal and behavioral dimensions and has been
extensively used in the marketing literature to study loyalty
(Ganesh et al. 2000; Oliver 1999). Nevertheless, Uncles
and Dowling (2003) noted that many researchers (Dick and
Basu 1994; Reichheld 1996; Reichheld and Detrick 2003)
argue that there must be a strong attitudinal commitment to
a brand for true loyalty to exist. Attitudinal approach plays
an important role in determining loyalty (Bloemer and
Kasper 1995).
The effect of CSR activities on CR, customer trust and
loyalty is of strategic importance to companies and has been
shown to influence the level of corporate commitment to
social responsibility (Stanaland et al. 2011; Stanwick and
Stanwick 1998). Lacey et al. (2015) show that CSR func-
tions not only as a motivator, but also as a hygiene factor in
influencing customer relationships and referral behavior.
The importance of CSR is driven by the fact that consumers
use their knowledge of CSR in the decision-making process,
thus leading to the achievement of organizational goals
(Nelson 2004). Social identity theory (Tajfel and Turner
1985) has been used to suggest a relationship between CSR
activities and consumer loyalty (Maignan and Ferrell 2004),
such that customers identify with a particular brand.
According to Luo and Bhattacharya (2006), CSR determi-
nes customer evaluation of three paths. First, some cus-
tomers not only care about the consumption experience, but
also want to form part of a community or wish to belong to a
social group when purchasing goods (Daub and Ergen-
zinger 2005). Second, CRS benefits rating since it
strengthens customers’ feeling of identification with the
organization and induces them to develop a sense of con-
nection with the company (Sen and Bhattacharya 2001).
And thirdly, CSR adds value to the company in such a way
that, all else being equal, more responsible companies will
be seen as providing more value to the market (Mohr and
Webb 2005). Several marketing studies have reported that
CSR can positively affect consumer attitudes and behaviors
toward the firm and its offering (Arikan et al. 2014; Bhat-
tacharya and Sen 2003; Folks and Kamins 1999; Lichten-
stein et al. 2004; Mandhachitara and Poolthong 2011).
Hence:
H1 Perceived CSR is positively related to customer
loyalty.
The Mediating Effect of CR
The positive impacts of CSR on customers’ outcomes have
been well documented in previous research. Empirical
The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of…
evidence has shown that firms’ CSR initiatives influence a
wide range of customer outcomes in terms of customer
loyalty and purchase intentions (Maignan et al. 1999; Sen
et al. 2006). In the field of management and organizational
studies too, CR has attracted particular attention and has
been examined as one of the most important outcomes of
CSR engagement (Bear et al. 2010; Kang 2014; Surroca
et al. 2010) and thus an essential mediator between CSR
and customer responses (Galbreath and Shum 2012; Won-
Moo et al. 2014). In this regard, Fombrun and Shanley
(1990) were the first to establish a link between CSR and
company reputation. The authors empirically found, from
the managers’ perspective, a direct relationship between
reputation and a construct similar to perceived CSR. They
thus demonstrate that CSR responds directly and positively
in the reputation of the business. In their opinion, CR
represents accumulated public judgment of companies over
time. Consequently, society’s perceptions of businesses’
concern in general can influence judgments, and companies
related to this social sensitivity are indicating that they
have achieved a mutualistic relationship with potentially
powerful groups in their environments (Fombrun and
Shanley 1990). Einwiller et al. (2010) subsequently dis-
covered that stakeholders attach different levels of impor-
tance to the different dimensions of CR and that social and
environmental responsibility are one of the most important
of these and have a significant direct effect on their emo-
tions and behavioral intentions.
Furthermore, Heikkurinen (2010) reports that by
adopting environmental and responsible identities, firms
can externally and internally improve their image among
stakeholders; enhance their strategic positions; and achieve
greater customer loyalty. It is suggested that companies
spend a considerable amount of time and capital reporting
and communicating their CSR-related actions (Mc Kinsey
& Company 2006). CR is a stable aggregate perceptual
representation of organizational past actions and future
prospects in the mind of stakeholders (Fombrun et al.
2000). CR is a result of a company’s management actions
and behavior, and CSR engagement can be the most
effective action for gaining a competitive advantage (Melo
and Garrido-Morgado 2012). It is suggested that the way
customers perceive CSR activities and the quality of their
relationship with the firm are important factors in deter-
mining their reaction (Bhattacharya et al. 2009).
All of these arguments suggest that CR, as a valuable
intangible asset, has the potential to mediate the effects of
perceived CRS on customer loyalty. This study uses sig-
naling theory as the framework for explaining this medi-
ating effect, namely the link between CSR, CR and
customer loyalty. According to this theory, signalers (fi-
nancial firms) send signals (reputation) to receivers (cus-
tomers) which subsequently utilize these signals to provide
705
feedback to the signaler (Connelly et al. 2011). In the field
of organizational studies, firms’ strategic actions and
choices send out signals to stakeholders, which are used to
build impressions of the firms and develop attitudinal and
behavioral responses (Basdeo et al. 2006). As such, CSR
practices provide the customers with signals about the
firm’s reputation (Hsu 2012), which in turn influence their
responses toward the firm. The study therefore posits that
the impact of perceived CSR on loyalty is mediated by CR.
Based on these arguments, this study hypothesizes that:
H2 CR mediates the effect of perceived CSR on customer
loyalty.
The Moderating Role of Organization Type:
Commercial Banks Versus Cooperative Banks
The authors further propose that the type of bank being
assessed by customers moderates the mediating effect of
CR in the relationship between perceived CSR activities
and loyalty. In this regard, among the different types of
financial organizations, those that form part of the social
economy—credit cooperatives and saving banks (Belmonte
and Cortés 2010)—represent a very particular case, given
their dual mission as both a business and a social organi-
zation. On the one hand, CSR is not a new concept for
credit cooperatives: Rather it forms the cornerstone of their
culture. Carrasco (2007) claims that cooperation and CSR
are synonymous, since certain cooperative principles lie at
the heart of CSR. Palomo and Valor (2004) suggest that
CSR can be exercised more effectively in cooperative
societies than in capital companies, in that the cooperative
principles that govern their operation involve an implicit
commitment to CSR in all its various manifestations.
Along similar lines, Mozas and Puentes (2010) propose
that cooperative principles might be seen as principles of
CSR to be followed by socially responsible companies,
thus making cooperative companies model CSR organiza-
tions. Such organizations are more oriented toward the
community in which they operate, and CSR plays a central
role in their corporate identity, since they perceive CSR as
an inherent part of their idiosyncratic identity. Scholars
have shown that CSR is currently better integrated into the
corporate identity of banks with a social tradition, while
commercial banks are now working to integrate CSR
principles into their corporate personalities (Pérez and
Rodrı́guez del Bosque 2012). The literature also shows
evidence supporting the strong influence of cooperative
values and culture on consumers’ perception of corporate
image (Nguyen 2006). In order better to serve the com-
munity and enhance corporate image, organizational cul-
ture in cooperatives must include not only various
principles of cooperation such as voluntary membership, a
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706
democratic system and the sharing out of surpluses among
members, but also other values such as social responsibil-
ity, environmental sustainability and business ethics (Davis
and Worthington 1993).
Pelsmacker and Janessens (2007) report that customer
perceptions of a firm’s ethics are a key component in the
purchase decision. Valenzuela et al. (2010) emphasize the
importance of ethical reputation for firms operating in
today’s competitive environment. For buyers, a firm’s
ethical reputation provides the reassurance that its dealings
are above board, thus making these suppliers desirable
business partners with which to do business. Socially
responsible behaviors can increase a company’s value in
that they can increase the stakeholders’ degree of confi-
dence and the organization’s level of reputation (Gazzola
2014). Myers (2003) suggests that customers tend to
affiliate themselves with a particular brand based on the
brand value, thus leading to brand identification. In this
context, Melisende (2007) argues that a firm can attract
consumers by offering a unique identity. Taking this idea
into account, the perception of socially responsible
behavior can reinforce commitment to a brand, since it
transmits a character comprising a differentiating system of
values (Turban and Greening 1997) and respect toward the
customer. This explains why customers repay these efforts
with loyalty toward the company (Maignan et al. 1999).
Thus, customers may also feel attracted to credit cooper-
atives on the basis of soft or emotional factors, such as an
appreciated difference in business principles and cultures
or better scores in non-financial performance indicators
than commercial banks. Nonetheless, although reputation
is always required as a way of making the firm’s social
strategy work better, Spanish credit cooperatives are per-
ceived negatively in terms of their reputation or brand
image, since they are little known or perceived as being
relatively unprofessional, in the sense that they are not
capable of offering the same product range, conditions or
services (Seguı́-Mas and Server 2010).
On the other hand, commercial banks are for-profit
companies under shareholder control (Salas and Saurina
2002). Their shares are in the hands of family, individual or
institutional investors, and as such, they have included
CSR in their strategies more recently than cooperative
banks (Illueca et al. 2009). Commercial banks have tradi-
tionally been more concerned with providing universal
banking services based on standards of reasonable effi-
ciency and a strong customer orientation (Pérez and
Rodrı́guez del Bosque 2012). However, growing social
pressure for financial institutions to incorporate this type of
activity into their agendas (Ogrizek 2002; Smith 2003)
together with the massive increase in CRS communications
(Forehand and Grier 2003), has raised suspicions as to the
reasons that have led commercial banks to implement these
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I. A. Aramburu, I. G. Pescador
policies and the sincerity of their incorporation of CSR into
their corporate identity.
Based on these characteristics, the authors propose that
the influence of CR on the relationship between CSR and
loyalty differs in the cases of cooperative and commercial
banking. The perception of the socially responsible
behavior of the credit cooperative, which is connatural with
its idiosyncratic nature, creates a series of associations that
favor commitment to brand loyalty. One may therefore
presume that these positive perceptions extend to the
relationship with their customers, given that the socially
responsible behavior must also be culturally rooted in the
organization and manifest itself in the ways employees
interact with each other and with the customer. In com-
mercial banking, on the other hand, one may presume that
these perceptions of socially responsible behavior are less
credible, meaning that in order for this behavior to achieve
attitudinal loyalty, it requires a strong CR.
On this basis, the last of the research hypotheses are
proposed:
H3 Organizational type moderates the mediating effect of
CR on the relation between perceived CSR and loyalty.
H3a In credit cooperatives, the mediating effect of CR on
the relation between perceived CSR and loyalty is partial.
H3b In commercial banks, CR fully mediates the relation
between perceived CSR and loyalty.
Research Method
This study was conducted in the banking sector, an area
that has pioneered the incorporation of CSR policies and
practices aimed at sustainability (Confederación Española
de las Cajas de Ahorro CECA 2008). Financial and bank
activity is closely linked to sustainability of economic
development and environmental sustainability. This is
because banking institutions, acting as intermediaries of
companies that need help to implement new projects, in
one way or another have a social and environmental impact
(Scholtens 2009). Compared to other sectors, banks have
greater visibility in society (Mandell et al. 1987) and higher
product investment. Furthermore, studies on CSR activities
and banks are very scarce (Carnevale et al. 2012; Fatma
et al. 2014). In order to test the hypotheses, a quantitative
study was conducted based on a personal survey of bank
customers in the Basque Country. The surveys were com-
pleted using in-depth interviews conducted over a 4-month
period in 2013. Respondents were customers of banking
services aged over 18. Customers were required only to
evaluate their principal banking company. After the
information collected had been processed, 572 valid
The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of…
surveys remained. In all, 118 customers evaluated com-
mercial banks, 176 customers evaluated the Basque credit
cooperative, and 278 customers evaluated saving banks.
Sample and Data Collection
A non-probabilistic procedure was used to select respon-
dents for the survey. In order to ensure a more accurate
representation of the data, multi-stage sampling by quotas
was used to select respondents to the survey based on the
customer’s gender and place of residence (province). The
sample broke down into 51.4% female and 48.6% male,
which is comparable to relative figures in the Basque
population at large (51.85% female and 48.15% male—
Instituto Vasco de Estadı́stica, Eustat, as of January 1,
2014). With regard to their province of residence, 13.82%
of customers in the sample were from Alava (as compared
to 14.69% of the total Basque population), 46.49% from
Bizkaia (52.81% in total population figures) and 39.69%
from Gipuzkoa (32.48% in the overall population).
Measurements
Based on the literature cited above, measurement items
were selected that were deemed appropriate for this study.
All measurement items had been validated in previous
studies, producing high Cronbach’s a. Seven-point Likert-
type scales were used to measure all the concepts in the
theoretical model (Fig. 1). CSR was measured using the
scale developed by Alvarado (2008). CSR was conceptu-
alized as a formative second-order construct with three
dimensions (social, environmental and economic) as sug-
gested by several authors (González-Ramos et al. 2014; Isa
and Reaste 2010; Martinez et al. 2014). The use of higher-
order constructs is appropriate for modeling multi-dimen-
sional latent variables and in order to reduce the com-
plexity of structural models (Hair et al. 2014). The
definition of CR was taken from Ponzi et al. (2011), while
loyalty includes only items measuring attitudinal aspects
(Garcia de los Salmones et al. 2010; Pérez et al. 2008).
Analysis and Results
Evaluation of Measurement Model
The psychometric property (i.e., reliability and validity) of
the instrument was tested using partial least square (PLS).
In the first step, the first-order measurement models were
tested for reliability, convergent and discriminant validity.
The result (‘‘Appendix 1‘‘) shows that the measurement
models are valid and reliable once certain items have been
removed. In terms of convergent validity, the criterion of
707
Hair et al. (2014) was used; almost all factor loadings are
[0.7 and the average variance extracted is [0.5. The
composite reliability and Cronbach’s alpha values are also
[0.7 (Fornell and Larcker 1981), evidencing the internal
consistency of the measures. Further, the square root of the
AVE is larger than the diagonal inter-construct correlation
(Fornell and Larcker 1981) and the heterotrait–monotrait
ratio of correlation (HTMT) between constructs is below
0.9 (Henseler et al. 2015) (see Table 1) and supports dis-
criminant validity.
In the second step, the second-order constructs were
validated using a two-step approach (Agarwal and Kara-
hanna 2000; Henseler et al. 2007). The convergent validity
of formative measurement, CSR, has been established with
a redundancy analysis (R2 = 0.749) (Chin 1998) and tested
for collinearity of indicators. All VIF values are\5.0 (Hair
et al. 2014), and there is no problem with collinearity.
Finally, the t values of the outer weights of economic,
social and environmental dimensions are significant. Based
on the reliability and validity analyses (Fornell and Larcker
1981; Hair et al. 2014), loyalty appears to exhibit satis-
factory measurement qualities and to be adequate. This
shows adequate measurement validity of the second-order
models (Table 2).
The nomological validity of the model is tested by
linking CSR to two of the most common consequences:
loyalty and CR (Klein and Dawar 2004). Given that CR has
also been considered as an antecedent of loyalty (Bar-
tikowski et al. 2011), these relations are also studied in the
analysis (see Table 3 ‘‘Hypotheses testing’’ section).
Model and Hypotheses Evaluation
Once the instrument had been validated, the structural
model was tested using partial least square structural
equation modeling (SmartPLS). PLS-SEM was selected
because of its relative robustness in working with smaller
and larger samples, a flexibility that is achieved by having
few limiting assumptions regarding model specifications
and data and provision of parameter estimates that maxi-
mize the explained variance of the dependent construct
(thus supporting prediction or theory). Its ability to be used
for confirmatory theory testing and model comparison was
also taken into account.
The essential criterion for the quality of the estimations
is the R2 of dependent latent variables (LV). Chin (1998)
speaks of a ‘‘substantial’’ R2 of 0.67, a ‘‘moderate’’ level of
0.33 and a ‘‘weak’’ level of 0.19. However, Aldas (2012)
stresses that these arbitrary standards should be revised in
the light of statistical power. Taking this into account,
sample sizes of over 75 can provide enough evidence that
R2 is significantly different to zero. Table 3 proves R2 of
this model to be substantial using Chin’s criterion, but the
123
708 I. A. Aramburu, I. G. Pescador

Fig. 1 The proposed model

Table 1 Discriminant validity of the first-order measurement model

Corporate reputation Economic dimension Environmental dimension Loyalty Social dimension

Corporate reputation 0.951 0.409 0.684 0.843 0.780

Economic dimension 0.445 0.733 0.404 0.466 0.495
Environmental dimension 0.633 0.448 0.880 0.632 0.853
Loyalty 0.776 0.513 0.601 0.974 0.765
Social dimension 0.712 0.527 0.797 0.713 0.838
Diagonal values in bold are square root of the AVE. Discriminant validity according to the criterion of Fornell–Larcker below the diagonal,
HTMT criterion above diagonal (in italics)

Table 2 Validation of the

Outer weight t value Outer loadings t value VIFa
second-order measurement
model CSR
Economic dimension 0.191*** 3.884 1.388
Environmental dimension 0.168** 2.795 2.753
Social Dimension 0.746*** 11.531 3.046
CSR Loyalty Corporate reputation

CSR na na na
Loyalty 0.731 0.974 0.843
Corporate reputation 0.722 0.776 0.951
a
Variance inflation factor
*** p \ 0.001;** p \ 0.01
Diagonal values in bold are square root of the AVE, discriminant validity according to the criterion of
Fornell–Larcker below the diagonal, HTMT criterion above diagonal (in italics)

authors are reasonably sure that a non-negligible part of
that LV variance is being explained, based on the power
analysis.
A second test commonly proposed is predictive rele-
vance. The Stone–Geisser Q2 test was performed for
dependent constructs. The results obtained indicate that the
model used is capable of prediction.
Thus, to test the hypotheses and to assess the presence
of mediating variables, the procedure outlined by Baron
and Kenny (1986) was followed. Initially, only the rela-
tionship between CSR and Loyalty was tested. The results
of the first model indicate that the model is capable of
prediction (R2 = 0.536, Q2 = 0.475), demonstrating a
significant relationship between CSR and loyalty

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The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of… 709

Table 3 Hypotheses testing

Standardized b Bootstrapping t value
path coefficients
H1: Perceived CSR ? customer loyalty 0.733*** 32.825
H2: Mediating effect of CR on CSR–customer loyalty
Perceived CSR ? customer loyalty 0.356*** 9.422
Perceived CSR ? corporate reputation 0.722*** 27.499
Corporate reputation ? customer loyalty 0.519*** 14.296
Model one R2 (customer loyalty) = 0.536, Q2 (customer loyalty) = 0.475
Model two R2 (corporate reputation) = 0.522, Q2 (corporate reputation) = 0.470; R2 (loyalty) = 0.662, Q2
(loyalty) = 0.627
*** p \ 0.001

(b = 0.733, t value = 32.825). Based on the results, H1 is
supported.
In the second model, the authors sought to test media-
tion effects. The model was run with all paths estimated as
specified in the hypotheses and for the mediation test. The
data indicate that the model is capable of prediction;
Table 3 shows no problem with this criterion as all statis-
tics are positive. The results of the second model (Fig. 3)
indicate that the previously significant relationship between
CSR and loyalty retains the significance (b = 0.356,
t value = 9.422), demonstrating the existence of partial
mediation (Baron and Kenny 1986). The second model
therefore suggests that CSR has a direct and indirect
(b = 0.375, t value = 12.315) impact on loyalty. 51.12%
of the effect of CSR on loyalty is explained by CR. This
partially supports H2. Contrary to predictions, the associ-
ation between CSR and loyalty is not only through CR;
CSR has a direct link with loyalty.
The moderating effects of the type of financial institu-
tion were analyzed using a multi-group comparison
approach (MGA), as the financial institution type of vari-
able was categorical (Henseler and Fassott 2010). For
MGA, responses were divided into two groups, depending
on the type of financial institution (group 1 = credit
cooperatives and group 2 = commercial banks). Then,
using PLS, the path coefficients were estimated for each
group or subsample (Sarstedt et al. 2011). Finally, the
differences between the coefficients’ paths were analyzed.
If they are significant, they can be interpreted as having
moderating effects. To determine the significance of dif-
ferences between the estimated parameters for each of the
groups, the permutation test was principally used. In
addition, in a complementary fashion, the parametric
approach was used considering both equal variances
[t parametric (EV)] and different variances [t parameter
(NEV)1
] (Chin 2000).
One fundamental requirement for carrying out multiple
group comparisons involves the establishment of
1
Welch–Satterthwaite test.
measurement invariance (Steenkamp and Baumgartner
1998), i.e., that the proposed measurement model does not
vary when the type of financial institution is considered.
For this purpose, a permutation algorithm was used,
namely the MICOM, described by Henseler, Ringle and
Sarstedt (2016). MICOM is used to determine whether
significant inter-group differences are due to inter-group
differences in constructs, when assessing composite mod-
els. MICOM is therefore a logically necessary step, prior to
conducting MGA. The values of Table 4 corroborate the
configural,2 compositional but not the scalar invariance.
Researchers may proceed with PLS-multi-group analysis
(PLS-MGA) in order to compare models in the sense of
comparing structural paths across groups if there is com-
positional invariance. In this regard, Henseler et al. (2016)
recommend interrupting MICOM analysis when composi-
tional invariance is established in order to run MGA to
determine whether structural invariance exists, prior to
interpreting results for scalar invariance.
Once the compositional invariance was guaranteed in
the measurement model, the multi-group analyses were
performed for Hypothesis 3, thus enabling the moderating
role of financial institution type on the relationships
included in the research model to be tested (Table 5).
Summing up, as Table 6 shows, the groups identified do
not sufficiently discriminate the relationship between the
different predictive variables and their dependent variables,
and the proposed hypothesis (H3) is not fulfilled.
Discussion
This study explores the formation of banks clients’ loyalty
as influenced by their perception of CSR activities and
investigates the key mediating influence of CR on the
relation between perceived CSR and customer loyalty. The
2
Running MICOM in SMARTPLS usually automatically establishes
configural invariance. The statistical output does not apply to this step
and is not shown.

123
710 I. A. Aramburu, I. G. Pescador

Table 4 Measurement invariance of composite model (MICOM)

Composite Correlation c value = 1 95% confidence interval Permutation p value Compositional invariance

Compositional invariance
CSR 0.986 [0.959; 1.000] .665ns Yes
Loyalty 1.000 [0.999; 1.000] .357ns Yes
ns
Corporate reputation 1.000 [0.999; 1.000] .330 Yes
Composite Mean difference 95% confidence interval Permutation p value Equal mean values?
CreditCoop-CommercialB.

Scalar invariance
CSR -0.003 [-0.233;0.255] 0.000 No
Loyalty -0.003 [-0.238;0.243] 0.014 No
Corporate reputation -0.002 [-0.240;0.253] 0.020 No

Composite Variance difference 95% confidence interval Permutation p value Equal variances?
CreditCoop-CommercialB.

CSR 0.010 [-0.281;0.341] 0.000 No

Loyalty 0.006 [-0.325; 0344] 0.084 Yes
Corporate reputation 0.006 [-0.255; 0.280] 0.036 No

5000 permutation run; two-tailed 0.05 significance level

Table 5 Results of the

Paths Credit cooperatives (n = 176) Commercial banks (n = 118)
structural model for the credit
cooperatives and commercial Coefficient t value Coefficient t value
banks subsamples
Model 1
Total effect perceived CSR in loyalty
CSR ? loyalty 0.687*** 14.311 0.752*** 17.652
Model 2
Perceived CSR ? loyalty 0.328*** 4.174 0.417*** 5.077
Perceived CSR ? corporate reputation 0.736*** 23.390 0.684*** 10.988
Corporate reputation ? loyalty 0.484*** 6.519 0.485*** 6.314
Indirect effect perceived CRS in loyalty 0.357*** 6.586 0.332*** 4.981
Model 1 credit cooperative: R2 (loyalty) = 0.472, Q2 (loyalty) = 0.417
Model 1 commercial banks: R2 (loyalty) = 0.565, Q2 (loyalty) = 0.530
*** p \ 0.001
Model 2 credit cooperative: R2 (reputation) = 0.542, Q2 (reputation) = 0.467; R2 (loyalty) = 0.576, Q2
(loyalty) = 0.521
Model 2 commercial banks: R2 (reputation) = 0.468, Q2 (reputation) = 0.427; R2 (loyalty) = 0.686, Q2
(loyalty) = 0.652
*** p \ 0.001

authors also explored the role of the type of company on
the responses of customers to their banking institutions.
This research comes in response to calls to identify the
influence of moderator variables on the effectiveness of
CSR effort (Barnett 2007).
In this context, this study has opted for a formative
measurement approach to capture activities that form per-
ceived CSR. A formative model enables managers to
determine which CSR dimensions are most influential in
forming the customers’ relationship (Isa and Reaste 2010).
In order to conceptualize CSR in the banking sector, the
theory of sustainable development has been used, a theory
which is widely supported in the academic literature. This
theory defines CSR as a multi-dimensional construct com-
posed of economic, social and environmental issues (Mar-
tinez and Rodrı́guez del Bosque 2012). Considering content
specification and indicator specification, we sought to
capture the major characteristics of this construct (Table 7).

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The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of…
Table 6 Multi-group comparison test results
|bcredit cooperative - t Parametric
bcommercial banks|
Total effect CSR on loyalty
Perceived CSR ? customer loyalty 0.064 1.034ns
Perceived CSR ? customer loyalty 0.086 0.790ns
ns
Perceived CSR ? corporate reputation .052 0.753
Corporate reputation ? customer loyalty .000 0.004ns
Indirect effect CRS on customer loyalty
Perceived CSR ? customer loyalty .025 0.301ns
ns = not significant differences at .05 [based on two-tailed t distribution
Nsig denotes nonsignificant difference at .05
This research shows that customer perception of a
bank’s CSR behavior has a greater influence on customer’s
attitudinal loyalty (b = 0.733***). These positive associ-
ations between CSR initiatives and customer attitudes
toward a financial institution are consistent with research
by Mandhachitara and Poolthong (2011). Specifically,
social initiatives by financial institutions contribute to
loyalty, whereas environmental and economic decisions do
so to a lesser extent (Fig. 2). This means that the social
dimension in the comprehensive management of social
responsibility adds most value in explaining the generation
of recommendation and attitudinal commitment to the
brand.
Nonetheless, including mediators and/or moderators in
the analysis can help determine under what conditions CSR
could advance these loyalty outcomes (Fig. 3). In this case,
the results also demonstrate the partial mediating role of
CR between perceived CSR and attitudinal loyalty
(b = 0.375***). This implies that business and social ini-
tiatives conducted by financial institutions also facilitate
attitudinal loyalty from customers (b = 356***). Consis-
tent with the tenets of signaling theory, social, economic
and environmental actions of the banks act as signals to
customers and are used to develop positive impressions of
the firms, resulting in loyalty toward the institution.
Engagement in CSR appears to forge better CR and
increase customer loyalty. In turn, the reputation of the
institution helps strengthen the customer’s links with the
institution. This finding suggests that CSR is a good
strategy and that the social dimension of CSR is the most
relevant dimension for generating customer loyalty. The
impact of CR should not be underestimated. CR influences
customer loyalty which is an important hallmark of a
successful bank. This conclusion ties closely with the lit-
erature on corporate marketing (Balmer et al. 2007) since
the objective of this activity is to strengthen CR and do so
in an ethical manner. Banks should see CSR as a means of
711
(EV) (NEV)
t Parametric Permutation test
Confidence intervals p value Significance
.303ns [-0.135 1; 0.138] 0.348 Nsig
.431ns [-0.233; 0.246] 0.496 Nsig
ns
.453 [-0.143; 0.147] .464 Nsig
.997ns [-0.216;0.216] .963 Nsig
.706ns [-0.180; 0.170] .817 Nsig
(4999), two-side test]
building intangible assets such as CR and loyalty, critical
for most companies.
Another finding of this paper has been to demonstrate
that no significant differences exist between credit coop-
eratives and commercial banks in terms of the role of
reputation and CSR as antecedents of loyalty. Customers
respond in the same way to CSR in the case of both
cooperatives and commercial banks. The CSR actions that
customers perceive credit cooperatives to be performing
generate similar degrees of loyalty and reputation as among
commercial banks. This may certainly be related to a
gradual change in society at large, which is increasingly
turning toward values of a post-materialist type. Customers
are not only demanding quality of products and services,
but also insisting that ethical issues be taken into account.
This has led all financial institutions to include CSR in their
strategies. The application and extension of cooperative
principles would therefore mean an advancement in
cooperative CSR (Carrasco 2005). However, credit coop-
eratives have not managed to differentiate themselves
through the development of cooperative values in CSR and
only recently have they employed it as a marketing
strategy.
The findings also demonstrate that loyalty and CR
among the customers of credit cooperatives are explained
by three dimensions of CSR, while in the case of com-
mercial banks, only social and economic dimensions drive
customer loyalty and reputation. The results may probably
be justified by reference to the longer CSR tradition of
cooperative banks as compared to commercial banks. In
other words, the business configuration of the credit
cooperatives, in which various stakeholders (suppliers,
customers and workers) are incorporated as partners,
facilitates the balanced satisfaction of their expectations,
while at the same time the partners can take an active
position in CSR activities. The credit cooperative is in
charge of funding the other cooperatives and thus ensuring
123
712 I. A. Aramburu, I. G. Pescador

their creation, development and continued ability to create
stable, high-quality employment. Moreover, the very
identity of the organizations, based as it is on values
(mutual assistance, responsibility, democracy, equality,
fairness, solidarity, honesty, transparency, social responsi-
bility) and principles (free membership, education, demo-
cratic organization, sovereignty of labor, universality,
participation in management, inter-cooperation, social
transformation, payment solidarity), allows them to inter-
nalize behaviors related to CSR (Arcas and Briones 2009).
Conclusions, Implications, Limitations and Future
Lines of Research
From a theoretical perspective, this paper seeks to bridge
some of the gaps in the literature on the effects of CSR on
customer loyalty. In this regard, the paper contributes to the
academic literature in three different ways:
Firstly, the results of the study support the premise that
perceived CSR affects customer loyalty. The paper
Table 7 Summary of hypotheses testing results
Hypotheses Result Baron and Kenny’s test
H1 Supported
H2 Partial supported Partial mediation
H3 Not supported
H3a Supported Partial mediation
H3b Not supported Partial mediation
contributes to a better understanding of the way in which
CSR can positively impact customer attitudinal loyalty,
especially through the corporate reputation perceived by
the customer. CR partially mediated the relation between
perceived CSR and customer loyalty, and therefore, CR is
not the only factor explaining the relationship between the
CSR activities set in place by the banks and bank
customers.
Secondly, the paper also provides an additional expla-
nation for the mixed results reported by previous scholars
when studying CSR from a reflective approach. Under-
standing CSR as a formative construct with three separate
dimensions makes it possible to provide additional infor-
mation to help understand the effect of CSR on attitudinal
loyalty. The results have several implications for managers,
including guidelines for implementing CSR, for example,
the importance of CSR dimensions in terms of CSR suc-
cess. In other words, the proposed model indicates the
relative importance of each of the formative measures, so
that managers do not waste their CSR effort by focusing on
relatively unimportant dimensions of CSR. The formative
approach may therefore be seen as being a better alterna-
tive than reflective conceptualization for the study of CSR
in theoretical and empirical research.
Thirdly, the authors have explored the role played by
company type in the mediating role of CR in CSR loyalty
relation. Although previous scholars have failed to study
the two types of company separately, the authors demon-
strate that customers respond equally to CSR actions and
CR-linked CSR implemented by financial institutions. Two

Fig. 2 First structural model

Fig. 3 Structural equation models with the estimated path coefficients

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The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of…
factors might explain these findings: on the one hand, the
limited use of communication tools by credit cooperatives,
given that their genuine commitment to CSR has led them
to invest less in communication; and on the other, the fact
that there exists a need for the cooperatives themselves to
advance further in cooperative principles, given that the
market does not, to any significant degree, perceive dif-
ferent forms of behavior consubstantial with their own
cooperative principles and values.
These findings have valuable implications for managers
seeking to develop enduring relationships with their cus-
tomers. First, with the increased importance of the stake-
holder perspective, today’s banking institutions are being
forced to manage properly their relationship not just with
multiple shareholders, but also with their multiple stake-
holders. Real, deep-seated prestige is achieved with con-
stant work and not with spectacular marketing campaigns.
The major endeavors of banking institutions should be
based on ethical behavior, as opposed to the speculative
attitudes of agents. Working with a long-term perspective
and adopting cautious behavior toward financial markets is
a way of giving human and social values precedence over
economic factors. This is precisely the approach currently
taken by a major part of the population. One might ask
whether this trend reflects a circumstantial attitude that will
disappear as soon as the economic situation becomes more
stable. Adopting a sustainable strategy means redefining
capitalism by introducing profitability criteria that are not
solely focused on financial performance, but also on eco-
nomic and social conditions, guaranteeing better distribu-
tion of wealth for people and ethical banking (Icke et al.
2011; San-Jose et al. 2011). The ethics of a business
depends on the company’s culture. All corporations have to
decide what to do and how to do it in order to align their
behavior with their ethical values. The decision to perform
activities in an ethical way is an example of moral behavior.
CSR activities can serve as a strategic tool that firms can
use to manage their relationships with customers, since
these activities—especially initiatives in the social area—
help them send the right signals to stakeholders and shape
their reputational perceptions. Managers should also clo-
sely monitor the firm’s reputation, given that it plays such a
critical role in the overall assessment of any bank. More-
over, more general practices that are designed to fulfill the
different needs of the community or society may influence
customers’ reputational perceptions. These perceptions
may in turn influence customer responses to the firm,
improving loyalty. It is therefore extremely important for
today’s banks to recognize the importance of proper
communication of CSR to different stakeholders and shape
their reputational perception.
The second implication concerns cooperative banks.
The results of the paper show that customers do not
713
perceive differences in the way social responsibility is
managed by cooperative and commercial banks. There is
therefore a need to capitalize on this factor. At a time when
CRS is (or is becoming) a competitive advantage for any
financial institution, it is necessary to communicate and
disseminate identity and values in the relationship with
customers. It is also necessary to go back to the origins of
the credit cooperatives with initiatives of social responsi-
bility oriented toward demands from customers, channeling
resources not only toward economic profit, but also toward
initiatives to transform the local area in which they operate.
The cooperatives’ strategy for the future should include a
strengthening of their social capital.
Nonetheless, this study contains some limitations that need
to be addressed in future research on the topic. Firstly, this
research explores the mediating role of CR in the relationship
between CRS and customer attitudinal loyalty. However,
there may be alternative mechanisms through which CSR
would influence different outcomes. For instance, CSR may
influence different customer outcomes through different
mediators, by strengthening brand equity, generating higher
levels of identification with the firm. The second limitation is
related to the method used to measure CR. Research into the
CR construct has been plagued by multiple definitions and
unclear operationalization (Lange et al. 2011). Agarwal et al.
(2015) argue that CR should be conceptualized as a multi-
dimensional construct, and therefore, future research must
include the specific dimensions of CR and identify the effect
of these dimensions of CR on customer outcomes. Thirdly,
customers were surveyed at a single point in time, with the
result that no conclusions could be drawn on effects. Longi-
tudinal designs could usefully be employed to examine these
relationships. Fourthly, this research focused on consumers in
the Basque Country. Future research might examine cus-
tomers in other countries or include cross-national studies to
generalize this result. Additionally, a qualitative study could
be developed specifically to explore the finding on the rela-
tionship between sustainability and attitudinal loyalty.
Finally, cooperative banking encompasses a very diverse
series of situations, with local organizations coexisting
alongside other larger entities; it is therefore complicated to
draw conclusions and comparisons that can be applied to each
and every one of these situations.
Compliance with Ethical Standards
Conflict of interest The authors declare no potential conflict of
interest with respect to the research, authorship and/or publication of
this article.
Ethical Approval All procedures performed in studies involving
human participants were in accordance with the ethical standards of
the institutional and/or national research committee and with the 1964
Helsinki Declaration and its later amendments or comparable ethical
standards.
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714 I. A. Aramburu, I. G. Pescador

Informed Consent Informed consent was obtained from all indi- Appendix 1: First-order measurement model
vidual participants included in the study.
validity and reliability

Factor Item Factor CR a AVE

loadings

Social dimension With regard to society, I think that the financial institution I habitually use does…
DS1: Try to sponsor socio-educational activities Removed
DS3: Try to sponsor public health activities Removed
DS6: Try to sponsor cultural activities Removed
DS2: Try to treat its employees fairly 0.807*** 0.934 0.914 0.705
DS4: Try to have an ethical code of conduct and respect it 0.888***
DS5: Try to make sure that it respects human rights 0.868***
DS7: Try to make economic donations to social causes 0.752***
DS8: Try to improve the quality of life of the local communities in which it operates 0.850***
DS9: Try to have a non-discriminatory recruitment policy 0.854***
Environmental With regard to the environment, I think that the financial institution I habitually use
dimension does….
DM1: Try to sponsor activities that favor the environment 0.858*** 0.960 0.951 0.775
DM2: Try to earmark resources for providing an environmentally compatible service 0.878***
DM3: Try to give an account of its environmental actions on a regular basis 0.869***
DM4: Try to carry out activities to reduce pollution 0.908***
DM5: Try to protect the environment 0.923***
DM6: Try to recycle its waste properly 0.819***
DM7: Try to make rational use of its natural resources 0.901***
Economic dimension With regard to business strategy, I think that the financial institution I habitually use
does….
DE1: Try to control production costs
Removed
DE2: Try to obtain the greatest possible economic profits to ensure its continuity
Removed
DE3: Try to encourage customer loyalty to ensure its long-term economic success 0.768*** 0.872 0.849 0.537
DE4: Try to improve the quality of the services it offers on a constant basis 0.838***
DE5: Try to ensure long-term economic success 0.599***
DE6: Try to have a competitive pricing policy 0.833***
DE7: Try to improve its economic performance 0.661***
DE8: Try to do everything possible to be more productive 0.661***
Corporate reputation Based on my experience, the financial institution I habitually use really,…
REPU1: is an institution I trust
Removed
REPU4: is an institution that transmits good sensations
Removed
REPU2: is an institution I admire 0.948*** 0.950 0.896 0.905
REPU3: is an institution I respect 0.954***
Recommendation Based on my experience of the financial institution I habitually use, I think I really
intention
INTR1: could say positive things about this bank/savings bank
Removed
INTR2: would recommend this bank to anyone asking me for advice 0.974*** 0.974 0.946 0.949
INTR3: would encourage friends and relatives to acquire a product or service from this 0.974***
bank /savings bank

*** p \ 0.001

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The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of… 715

Appendix 2: The questionnaire

1.-With regard to society you think that the financial institution you habitually use does…

Try to sponsor socio-educational activities 1 2 3 4 5 6 7

Try to sponsor public health activities 1 2 3 4 5 6 7

Try to sponsor cultural activities 1 2 3 4 5 6 7

Try to treat its employees fairly 1 2 3 4 5 6 7

Try to have an ethical code of conduct and respect it 1 2 3 4 5 6 7

Try to make sure that it respects human rights 1 2 3 4 5 6 7

Try to make economic donations to social causes 1 2 3 4 5 6 7

Try to improve the quality of life of the local communities in which it

1 2 3 4 5 6 7
operates
Try have a non-discriminatory recruitment policy 1 2 3 4 5 6 7

2.-With regard to the environment you think that the financial institution you habitually use does….

Try to sponsor activities that favor the environment 1 2 3 4 5 6 7

Try to earmark resources for providing an environmentally-compatible

1 2 3 4 5 6 7
service
Try to give an account of its environmental actions on a regular basis 1 2 3 4 5 6 7

Try to carry out activities to reduce pollution 1 2 3 4 5 6 7

Try to protect the environment 1 2 3 4 5 6 7

Try to recycle its waste properly 1 2 3 4 5 6 7

Try to make rational use of its natural resources 1 2 3 4 5 6 7

3.-With regard to business strategy you think that the financial institution you habitually use does….

Try to control production costs 1 2 3 4 5 6 7

Try to obtain the greatest possible economic profits to ensure its continuity 1 2 3 4 5 6 7

Try to encourage customer loyalty to ensure its long-term economic

1 2 3 4 5 6 7
success
Try to improve the quality of the services it offers on a constant basis 1 2 3 4 5 6 7

Try to ensure long-term economic success 1 2 3 4 5 6 7

Try to have a competitive pricing policy 1 2 3 4 5 6 7

Try to improve its economic performance 1 2 3 4 5 6 7

Try to do everything possible to be more productive 1 2 3 4 5 6 7

4.- Based on your experience, the financial institution you habitually use really,…

is an institution I trust 1 2 3 4 5 6 7

is an institution that transmits good sensations 1 2 3 4 5 6 7

is an institution I admire 1 2 3 4 5 6 7

is an institution I respect 1 2 3 4 5 6 7

5.- Based on your experience of the financial institution you habitually use, you think you really

could say positive things about this bank/savings bank 1 2 3 4 5 6 7

would recommend this bank to anyone asking me for advice 1 2 3 4 5 6 7

would encourage friends and relatives to acquire a product or service from

1 2 3 4 5 6 7
this bank /savings bank

123
716
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