Does it pay to be a reputable company? Insights from the instant noodles market

Youngjin Hong (), In Kyung Kim () and Kyoo il Kim ()
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Youngjin Hong: Department of Economics, Sogang University, Seoul, Korea
In Kyung Kim: Department of Economics, Sogang University, Seoul, Korea
Kyoo il Kim: Department of Economics, Michigan State University

No 2304, Working Papers from Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy)

Abstract: This paper empirically examines the extent to which enhancing a corporate image through diverse corporate social responsibility (CSR) activities affects consumer choices and firm sales. By utilizing sales and pricing information from the Korean instant noodles market in the 2010s, we find evidence that the improvement of Ottogi’s corporate image, one of the major instant noodle producers in the country, positively affected consumer utility for the firm’s products. Importantly, Ottogi’s annual sales increased by 52 million packages, or 12.4%, on average, thanks to the firm’s CSR activities and subsequent image improvement. This effect is equivalent in size to that of an 11% price cut or a 160% increase in advertising spending. Our findings suggest that CSR can promote firm growth by boosting product sales.

Keywords: Corporate image; CSR; Nested Logit; Instant noodles (search for similar items in EconPapers)
JEL-codes: D12 L66 M14 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2023
New Economics Papers: this item is included in nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:sgo:wpaper:2304

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