Turning loss into gain: how distressed brand’s philanthropic corporate social responsibility drives customer citizenship

Corporate social responsibility (CSR) has become increasingly prevalent in recent decades, as companies have realised that alongside profit-making, contributing to the betterment of society is essential for long-term success (Hasudungan and Saragih, 2023; Zhang and Wang, 2022). From a marketing perspective, CSR initiatives play a critical role in building consumer trust, promoting positive brand associations, enhancing long-term brand equity and making companies socially conscious and trustworthy in the minds of consumers (Gilal et al., 2023; Huang, 2023). One key aspect of CSR is philanthrophy, which involves companies’ voluntary and unpaid contributions to social causes and the public good (Wang and Pala, 2020). While financially stable companies may leverage CSR as part of an aggressive brand-building strategy, financially struggling brands can adopt philanthropic CSR as a survival mechanism to mitigate risk and foster consumer goodwill in challenging times.

Customer citizenship behaviour refers to voluntary actions taken by customers on behalf of a firm. These actions are helpful, although they are not required to provide the main services (Soomro et al., 2024; Yang et al., 2022). Prior research suggests that the public has a positive perception of companies involved in charitable programs and is willing to support these organisations by purchasing their products and services (Hur et al., 2020; Norouzi and Asl, 2023). It has been argued that such behaviour can enhance a firm’s value and productivity over time (Gong and Yi, 2019).

Despite the growing body of literature on CSR (see Table A1 in the  Appendix) (Fatma and Khan, 2023; Hakim et al., 2024; Mubushar et al., 2024; Norouzi and Asl, 2023; Shen et al., 2024; Waris et al., 2024; Wu et al., 2023), the effect of philanthropic CSR on consumer behaviour remains poorly understood (Hwang et al., 2019). Existing research has analysed the impact of CSR on corporate image and customer loyalty, whereas few scholars have investigated the effect of philanthropic CSR adoption on consumer behaviour in the marketplace, particularly volunteerism (Hwang et al., 2019; Norouzi and Asl, 2023). This is important because many businesses and branding strategies are increasingly focusing on philanthropy as a cost-effective tool for managing consumer relationships and building brand equity (Sheehy and Farneti, 2021). Previous studies have proposed that CSR practices engender positive consumer behaviours and attitudes towards a brand (Hakim et al., 2024). However, the underlying psychological mechanisms and boundary conditions shaping these outcomes remain poorly understood, particularly for philanthropic CSR. Most importantly, there is a gap in the literature on financially troubled firms, because most companies that engage in CSR are well managed. Few attempts explore how financially distressed firms engage in CSR as a strategy to enhance brand reputation and consumer support (Farooq et al., 2021).

To deepening our understanding, this study examines the effects of philanthropic CSR on customer citizenship behaviour by considering two mediators, CSR support and corporate reputation, and two moderators, brand preference and CSR-brand fit. CSR support refers to consumers’ favourable disposition towards socially responsible behaviour, which may explain why they take action in response to CSR (Uyar et al., 2021). Corporate reputation captures overall brand perceptions, which may be shaped by CSR efforts and subsequently influence customer behaviour (Bianchi et al., 2019). Meanwhile, brand preference and CSR-brand fit may either enhance or hinder the impact of CSR (Fatma and Khan, 2023; Mukhtar et al., 2023). These factors reflect consumers’ pre-existing attitudes and the perceived alignment between the CSR initiatives and brand identity.

To advance theoretical understanding, this study addresses these gaps by integrating the deservingness theory, the theory of reasoned action, and the legitimacy theory, offering strategic insights for managers (Ajzen and Fishbein, 1970; Feather, 2006; Suchman, 1995). These theories suggest that consumers who perceive a brand’s moral sacrifice may feel compelled to reciprocate through voluntary brand-supporting actions. This study analysed the effect of brand philanthropy on customer citizenship behaviour and the mediating effects of CSR support and corporate reputation. The moderating effects of brand preference and CSR-brand fit were also examined. These aspects are important for marketers because they illustrate how CSR activities can be leveraged to increase consumer citizenship behaviour and engagement.

Deservingness is associated with several theoretical constructs regarding the impact of value on daily choices concerning events, outcomes, and broader decisions involving an individual’s perceived responsibility for those events and outcomes (Feather, 2006). The deservingness theory refers to an individual (brand) who deserves, based on the degree of importance attached to him or her. Individuals usually try to garner sympathy from groups that meet certain criteria and are accepted as deserving (Bor and Simonovits, 2021). Customers may start feeling more sympathetic towards the brand if it is in financial trouble. The connection between sufferers and helpers is essential, as altruistic responses, such as compassion, are extended to sufferers who are perceived as cooperative (Van Doesum et al., 2021).

The concept of “deservingness” is pivotal to understanding how consumers evaluate a brand’s CSR efforts, particularly during financial distress. Drawing on Feather’s (2006) deservingness theory, individuals assess if an entity “deserves” support based on the alignment between its actions and its outcomes. The deservingness theory suggests that support for distressed brands is based primarily on the belief regarding the trade-off between CSR and the underperformance of the brand (Palmeira et al., 2021). For example, consumers may consider a brand’s CSR efforts as mitigating factors to explain poor financial performance as long as the market conditions are blamed, correctly or wrongly, for the financial problems of the company. Perception shifts when internal failures such as mismanagement are seen as the root cause of poor performance, leading consumers to view CSR efforts as disingenuous and undeserved (Gilal et al., 2023). This duality creates a compelling argument for understanding how CSR must be intertwined with brand legitimacy evaluations (Suchman, 1995).

For financially distressed brands, consumers’ judgments of deservingness are not merely a function of CSR magnitude but also perceived sacrifice: a struggling brand’s decision to prioritise societal welfare over self-interest may amplify its moral legitimacy (Suchman, 1995), thereby enhancing its “deservedness”. In this context, financially distressed brands engaging in CSR may be perceived as exerting efforts to “redeem” themselves, triggering customer citizenship behaviour through deservedness judgments. Such an evaluation is contextualised by the theory of reasoned action (Ajzen and Fishbein, 1970), which posits that behavioural intentions (e.g. supporting a brand) depend on one’s attitude (e.g. admiration for CSR) and subjective norms (e.g. societal approval of philanthropy) (Rausch and Kopplin, 2021). “Deservingness” creates an evaluative mindset and undertone that comments on enhanced features of pro-social acts, which through the theory of reasoned action affects the customer’s intention, and in the long run, what the customer will do, in this case, brand loyalty and advocacy. For distressed brands, the theory of reasoned action explains how consumers’ empathetic attitudes towards CSR, rooted in deservingness judgments, translate into citizenship behaviours, even when brand performance is poor (Hwang et al., 2019).

The deservingness theory and the theory of reasoned action provide a foundation for understanding consumer reactions towards companies’ social responsibility activities. While previous studies emphasise role of CSR in enhancing brand equity for stable firms (Mansouri et al., 2024), this study focuses on distressed brands and brings deserving subtleties into the picture. Consumers may value CSR as more “deserving” when brands, even in financial trouble, forego self-interest for societal benefit (Feather, 2006; Godfrey et al., 2009; Harell et al., 2021). This relationship depends on the consistency of brand performance and CSR-brand fit, since a lack of trust may arise from misalignment (Gilal et al., 2023). This study proposes that consumers’ judgments of financially distressed brands’ philanthropic CSR directly determine their attitudes, intentions, and behaviours, aiding in closing the gap between empathy and specific actions for the brand.

CSR encompasses actions taken by an organisation to improve society that extend beyond core business objectives (Gilal et al., 2023). Philanthropic CSR is the voluntary provision of cash or other resources assets to the community through private firms for public benefit (Wang and Pala, 2020). It has received increasing scholarly and industrial interests in the context of the social value created by corporations.

This corresponds with the legitimacy theory, which argues that CSR is instrumental in meeting social contracts formed with stakeholders (Olateju et al., 2021). The legitimacy theory posits that firms must align their actions with societal expectations to maintain stakeholder support (Suchman, 1995). The literature generally agrees that firms benefit from philanthropy in the long run and concentrates on the motivations and results of corporate giving. Many studies have examined the effects of corporate philanthropy on a company’s profitability and financial success (e.g. Cha et al., 2022; Ying et al., 2024). For instance, CSR initiatives have been found to enhance firm performance through a global strategic posture (Cha et al., 2022), whereas board attributes moderate the relationship between corporate philanthropy and firm performance (Ying et al., 2024). However, the effect of philanthropic CSR on customers remains largely underexplored.

The risk management hypothesis of Godfrey et al. (2009) indicates that CSR programs have a different function for firms suffering economic hardship than for those that are stable. CSR serves not only as a goodwill gesture but also as a tactic to reduce the risk for firms in financial distress. Phasing CSR into brand philanthropy for struggling brands enhances legitimacy by signalling compliance with society even when the brands are suffering financially. Legitimacy increases customer citizenship behaviour as customers may support the brand as a way of reciprocating goodwill (Du et al., 2010). This resonates with Kim and Woo’s (2018) CSR as a reputation management strategy for distressed firms that seek to limit stakeholder defection in times of crisis to maintain a favourable image. Similarly, trust and resilience brought about by CSR initiatives in struggling firms greatly contribute to their survival (Jung and Lee, 2022). These findings underscore that social responsibility, particularly, serves as an “insurance-like” strategy where without a cushion, the obligation to social welfare provided through CSR must replace short-term objectives where the firm is financially constrained. This defensive role is highly relevant for distressed companies that frequently suffer from reputational risks of public scrutiny. For such companies, social responsibility might be appealing to a wider range of consumers, as stakeholders value the effort being put forth to try to alleviate their self-inflicted financial suffering.

Customers’ philanthropic CSR perceptions are consumer opinions on how businesses address broader social issues concerning stakeholder groups (Pérez and Rodríguez Del Bosque, 2012). This notion is rapidly gaining attention in academic literature as it increases customer-related advantages, including satisfaction, repurchase intentions, and customer desire to refer the firm to other customers (Del Mar García de los Salmones et al., 2005). Research on consumer attitudes is crucial in both academia and industry because it is believed to have a direct impact on the development and efficacy of corporate strategies (Liu et al., 2023).

Customer citizenship behaviour is defined as “voluntary and discretionary behaviors that help the service organization overall but are not necessary for the successful production or delivery of the service” (Groth, 2005, p. 11). Apart from its crucial role in providing services, customers can view customer citizenship behaviour as a voluntary action that enhances and supports organisational performance (Fatma and Khan, 2023; Mubushar et al., 2024).

Several studies have found that a company’s CSR activities have a direct and significant impact on its customer citizenship behaviour (Hakim et al., 2024; Mubushar et al., 2024; Shen et al., 2024). This form of customer engagement may affect the potential value and long-term profitability of an organisation. Customers are more likely to feel good about a brand when it addresses social issues. Customer citizenship behaviour exemplifies voluntary customer behaviour that does not require rewards (Gilde et al., 2011). The efficacy of this behaviour depends on consumer perceptions.

Rooted in the deservingness theory, consumers who perceive a distressed brand’s CSR as “deserving” (Feather, 2006) are more likely to reciprocate through customer citizenship behaviour (Groth, 2005). The theory of reasoned action further explains this association: positive attitudes towards CSR (attitude) drive intentions to support the brand (intention), which manifests as voluntary advocacy or purchases (behaviour) (Ajzen and Fishbein, 1970). This study proposes that customers are more likely to reciprocate through customer citizenship behaviour if they perceive a distressed brand’s CSR activities as beneficial, provided they have a positive impression of the activity. Based on the above discussion, we propose the following hypothesis:

Consumers’ willingness to support and participate in a company’s CSR initiatives is referred to as CSR support (Ramasamy and Yeung, 2008). Research has shown that this willingness is influenced by the perceived authenticity and impact of CSR initiatives (Huang, 2023). Academics maintain that the level of support and appreciation for a company’s social responsibility initiatives is balanced by their expectations, which underscores both the rewards and penalties associated with the company’s behaviour (Uyar et al., 2021). Customers who adjust their buying behaviour to adopt more socially responsibility tend to be interested in supporting ethical businesses (Ajina et al., 2019).

According to the theory of planned behaviour (Ajzen and Fishbein, 1970), one’s intention to perform a defined behaviour is determined by one’s attitude towards it, subjective norms, and perceived behavioural control over it. In the CSR context, an individual’s support depends on how they perceive CSR initiatives, the social norms that exist around CSR, and what they feel they can control. Many consumers are willing to adopt strategies, such as boycotting and ethical purchasing, to compel businesses to be socially responsible. Consumers’ attitudes towards a firm, whether strongly favourable or unfavourable, are reflected in their acceptance of CSR (Luger et al., 2021). Customer support for CSR initiatives by the company would likely increase if the customer held a favourable regard towards a philanthropic-oriented CSR. Customer advocacy and purchasing support from customers towards CSR will likely be forthcoming if customers believe that these efforts are sincere and useful (Wu et al., 2023). Based on these findings, we propose the following hypothesis:

The theory of reasoned action establishes a connection between attitudes, intentions, and actions (Ajzen and Fishbein, 1970). Essentially, a person’s planned action, in combination with his or her attitude towards the expected result, influences their social actions (Fishbein and Ajzen, 2010). Consumers with favourable perceptions of or confidence in a company are more likely to feel obligated (Zhu et al., 2016). This is in line with the deservingness theory, which suggests that consumers’ empathy towards brands perceived as “deserving” due to their CSR efforts enhances their voluntary behaviours (Van Doesum et al., 2021). Customers are more inclined to participate in volunteer activities when they support a company’s CSR initiative. Supportive individuals are more likely to engage in positive citizenship actions that benefit their businesses (Arshad et al., 2021). Based on these results, we propose the following hypothesis:

Corporate reputation is defined as the overall perception of an organisation’s past and expected actions and its effectiveness, based on how it compares to its main competitors (Walker, 2010). This represents an overall assessment of a company’s attractiveness to its stakeholders.

The legitimacy theory (Suchman, 1995) asserts that a company’s legitimacy is derived from its alignment with societal norms and expectations. CSR initiatives that align with these norms aid companies in maintaining their legitimacy in the eyes of stakeholders including consumers, investors, and the public. Scholars generally agree that perceived CSR could enhance a company’s reputation over time (Bianchi et al., 2019). Companies that develop social responsibility-related plans, regulations, and procedures are perceived as having a good reputation (Srivastava, 2024). It has also been revealed that customer perceptions of CSR can mitigate the negative effects of corporate hypocrisy (Lee and Hur, 2024).

For a brand to engage in CSR activities, it must have a certain reputation, as customers may be wary of such efforts when they come from businesses with challenging corporate images. Consequently, reputation is a rare and challenging aspect of copying intangible assets (Bianchi et al., 2019). Organisations perceived as socially conscious are often viewed favourably, which may increase their corporate reputation and customer loyalty (Subedi et al., 2023). The legitimacy gained through CSR initiatives is particularly important for companies that face challenges such as financial distress, as it helps mitigate reputational risks. Based on these results, we propose the following hypothesis:

The legitimacy theory (Suchman, 1995) suggests that consumer support for a company’s CSR actions signals to other stakeholders that the company is fulfilling its social contracts, thereby enhancing its reputation. Consumers who support CSR actions help build a company’s legitimacy in society, which in turn improves its overall reputation (Subedi et al., 2023). This suggests that consumer CSR support not only enhances corporate reputation but also solidifies a company’s position in the market, particularly when it is perceived as socially responsible.

CSR initiatives provide a way for companies to strengthen their reputations, particularly when consumers view CSR actions as a sincere effort rather than a marketing strategy.

CSR support is a necessary condition for a desirable corporate identity (Vieira et al., 2022). Customers identify more with a firm that provides stronger support for CSR. Ultimately, this results in increased customer word-of-mouth and improved firm value.

Corporate reputation is widely recognised as a customer’s overall assessment of a company (e.g. management, employees, other customers, and/or known corporate activities) (Walker, 2010). Consumers who think highly of a business are more likely to take positive actions such as telling others about the business and providing helpful criticism (Latif, 2021). Corporate reputation has been found to affect both consumer loyalty and citizenship behaviour, indicating that a positive reputation could bring about other desired non-financial advantages, such as customer readiness to offer feedback, tolerate mistakes and assist other customers (O’Connor and Assaker, 2022). Based on these findings, the following hypotheses are proposed:

The mediation model (Baron and Kenny, 1986) posits that a mediator plays an intermediary role in the relationship between the independent and dependent variables. Supportive customer behaviour and positive company image have been reported to stem from positive attitudes towards CSR activities (Bianchi et al., 2019). In this regard, consumer CSR support serves as a mediator between consumers’ perceived philanthropic CSR and citizenship behaviour.

The mediating effect highlights the role of consumer support in the realisation of the benefits of CSR activities. In line with the deservingness theory (Feather, 2006), consumers’ support for CSR initiatives is influenced by their judgement of the company’s “deservedness”. Consumers are perceived as more supportive of CSR initiatives when these initiatives are considered morally acceptable (Srivastava, 2024). Consumer support for CSR is one of the most powerful drivers of firms’ consumer initiatives. In this investigation, consumers’ perceptions of CSR in philanthropy are treated as attitudes that trigger supporting intentions and citizenship behaviour. By projecting a responsible corporate image, companies can effectively attract and enhance customer support, resulting in behavioural intentions (Nguyen-Viet et al., 2024). Based on these findings, we propose the following hypothesis:

Corporate reputation plays a mediating role in the relationship between philanthropic CSR initiatives and consumer behaviour. The legitimacy theory (Suchman, 1995) explains how CSR can either build or reinforce a company’s legitimacy and actions, particularly when the company’s actions align with societal values and expectations. CSR initiatives, particularly those that are genuine, altruistic and selfless, improve a company’s social legitimacy, which affects consumers’ buying behaviour (Olateju et al., 2021).

Nonetheless, the role of corporate reputation as a mediator is an emerging area of research, and a notable reputation aids in enhancing the customer behaviour generated by CSR activities (Islam et al., 2021). A company’s promotion of reputation, through CSR initiatives, allows the company to build consumer trust and participation, further increasing the importance of CSR in customer inaction (Indah and Nizar, 2021). Corporate reputation is one of the most crucial mediators of the relationship between customers’ perceptions of CSR and citizenship behaviour. Based on these findings, we propose the following hypothesis:

Brand preference is the tendency to select a product or service over similar ones that are priced and featured as rich (Cobb-Walgren et al., 1995). Even when other brands provide superior value, consumers who prefer a certain brand are more likely to adhere to it (Li et al., 2021). Brand preference sums up how consumers view brand stimuli in their minds and characterises their propensity towards specific brands (Mukhtar et al., 2023). Consumer perceptions of a brand’s attributes shape their preferences and attitudes, which, in turn, shape their intentions and brand choices.

Preference is a state of transition between the inputs and outputs of a consumer choice model that relates information processing to decision-making or purchase intentions (Junarsin et al., 2022). According to the theory of planned behaviour (Ajzen and Fishbein, 1970), attitudes and subjective norms (including brand preference) influence consumer behaviour. When consumers already have a positive predisposition towards a brand, they are more likely to support their CSR efforts. Consumers prefer brands that provide meaningful experiences (Feng et al., 2023). Those with strong brand preferences are more likely to respond favourably to philanthropic CSR efforts, thereby increasing their support and engagement (Hwang et al., 2021). Based on these results, the following hypotheses are proposed:

The synergy between a brand’s CSR activities and its core brand attributes, such as values, products, or services, is referred to as the CSR-brand fit (Yoo and Lee, 2018). A high degree of CSR-brand fit encourages the beneficial effects of CSR initiatives on consumer attitudes and behaviours (Gilal et al., 2023). For example, strong CSR-brand fit enhances the effect of perceived CSR on consumer support (Gilal et al., 2021). The legitimacy theory suggests that strong CSR-brand fit increases consumers’ acceptance of a brand’s CSR activities, irrespective of the nature of the activities. Consumers identify brands with CSR activities that coincide with their brand identity as more credible and responsible (Fatma and Khan, 2023). On the contrary, failure to meet the CSR activities and the brand’s identity can result in consumers viewing CSR efforts as disingenuous or purely opportunistic, which decreases their intention to support the brand.

This moderating effect can help companies coordinate philanthropy-oriented CSR campaigns to collect the maximum levels of customer aid and engagement (see Figure 1). People are more likely to support CSR activities if they are in line with the company’s business and brand values, because of the perceived authenticity of CSR efforts. For instance, when a socially responsible business starts a new project, a company specialising in charitable activities tends to attract more attention and support than a company that does not embrace a CSR perspective (Gilal et al., 2023). Based on these findings, we propose the following hypothesis:

A recent real-world phenomenon provides a valuable background for this study. In 2021, Hongxing Erke, a comprehensive Chinese sporting goods brand, became the focus of public discussion due to what the media called a “bankruptcy donation”. Despite suffering an annual loss of 220 million yuan and holding only 60 million yuan in book balance, the company donated 50 million yuan to support flood relief in Henan Province (Zhang, 2023). This act of apparent moral sacrifice triggered positive responses on social media. Beyond this donation, the brand has been involved in a range of CSR activities such as poverty alleviation, education support and environmental initiatives. These donations sparked public discussion, with many praising the brand’s selflessness and strong sense of social responsibility. Meanwhile, Hongxing Erke’s philanthropic initiatives have received substantial support from consumers, including brand advertising, supporting online and offline shops, and increased word-of-mouth to others. Within a single day, the brand’s live-streaming sessions on platforms, such as Taobao, witnessed a massive increase in viewership, with sales increasing 52 times.

The methodology used in this study was a survey. Using consecutive sampling techniques, completion of the questionnaire was a prerequisite for inclusion in the study. The survey was distributed via Wenjuanxing (www.wjx.cn), a widely used self-administered online questionnaire platform in China. It maintains relationships with many online brand communities and randomly distributes the questionnaire link to several sports forums. Owing to its expertise in consumer research, Wenjuanxing can gather a large pool of active members from sports communities (Zhou et al., 2023). The rigorous screening system of the platform ensured the reliability and authenticity of the collected data.

The questionnaire used the sports brand Hongxing Erke as the brand context. Those who had experience buying sports products were eligible for inclusion in this study. To guarantee the reliability and validity of the research outcomes, all surveys were translated into Chinese, and the items were used as feasible. The main objective was to ensure that the materials used were identical to those used previously in esteemed national and international academic publications. An initial pre-test of the questionnaire was included to ensure that the instrument was appropriate. Three doctoral students majoring in sports marketing examined the questionnaire’s validity. After conducting this small-scale test, the items were revised based on the pre-test results.

Subsequently, a comprehensive survey is conducted to validate the proposed model. All participants provided informed consent prior to beginning the survey, and participation was entirely voluntary and anonymous. The questionnaire comprised four sections. The first part introduces the philanthropic CSR behaviours of Hongxing Erke. The second part eliminated those who had not bought Hongxing Erke’s products. The participants were asked if they had purchased Hongxing Erke’s products. Those who answered “yes” were requested to finish the subsequent questions. The third part acquires demographic data from the sample. The last part consistes of questions for testing all the variables. In total, 480 questionnaires were collected. After rearranging and aligning the questions and eliminating invalid samples (questions with responses that were too quick or had several identical responses), 395 valid survey responses were obtained (82.3%).

The descriptive statistics for the sample are provided in Table A2 (see the  Appendix). In the large-scale survey, 62.78% of respondents were male (n = 248), which was marginally higher than the female respondents (37.22%, n = 147); 34.38% (n = 165) of the respondents were aged between 18 and 25 years. A majority of the participants (38.75%, n = 186) held a bachelor’s degree and 23.54% (n = 113) were full-time students.

The constructs within the conceptual model were evaluated using relevant pre-existing literature measures. A four-item scale developed by Del Mar García De Los Salmones et al. (2005) is used to evaluate consumers’ perceptions of philanthropic CSR. To gauge customer citizenship behaviour, six questions from Groth (2005) were adopted. To measure CSR support and corporate reputation, the four-item scale of Ramasamy and Yeung (2008) and the three-item scale of Bianchi et al. (2019) were adopted. CSR-brand fit was measured using three questions taken from Berens et al. (2005) and Kim and Lee (2019). Concerning brand preference, we adopted a three-item scale from Overby and Lee (2006) and Jamal and Al-Marri (2007). All items in the questionnaire were adopted on a 7-point Likert scale (from “1 = strongly disagree” to “7 = strongly agree”).

This study implemented countermeasures to to minimise the risks associated with common method bias within a cross-sectional research design (Kock, 2015). A cover page has been appended to address the pertinent details. First, the respondents were assured that their identities and responses to the questionnaires would be kept confidential. Second, it was emphasised that no answers were more correct or appropriate than others and that respondents were free to provide answers that reflected their genuine thoughts and experiences to minimise social desirability bias. Third, respondents were introduced to the donation behaviour of the Hongxing Erke in detail. This was done to guarantee that participants understood the subject at hand to reduce the likelihood of misunderstanding, thus ensuring their answers were biased.

Statistically, common method bias was evaluated before using PLS-SEM. A variance inflation factor (VIF) of more than 5 is a sign that the model may contain common method bias (Kock, 2015). A comprehensive examination of collinearity was done to check the VIF values. All factor-level VIF values were under 5, ranging from 1.367 to 4.238.

Smart PLS 4.1 was utilised to analyse the data gathered from the survey. The goodness-of-fit indices of the model were satisfactory (see Table A3 in the  Appendix), with SRMR = 0.041 (ideally less than 0.08) and NFI = 0.917 (ideally above 0.90) (Sathyanarayana and Mohanasundaram, 2024).

Appropriate questions were asked to evaluate each of the six factors. Validity and reliability analyses were conducted for each assessment to determine if the items were appropriate for the study setting. All reliability and convergent validity findings of the aforementioned variables are displayed in Table A3 (see the  Appendix) of the study model. To measure discriminant validity, the heterotrait–monotrait (HTMT) ratio of correlations was applied. Table A4 (see the  Appendix) depicts that all of the HTMT values were lower than 0.90 (Henseler et al., 2015), suggesting that there were no issues with discriminant validity. Based on the scores, all variables passed the validity and reliability tests.

Tables 1, 2, 3 and 4 present the results of the structural model. The findings showed that all direct impact hypotheses were supported by the path coefficient analysis (Table 1). Particularly, the substantial effect of consumer perceptions of philanthropic CSR on customer citizenship behaviour validates H1 (β = 0.269, p = 0.001). H2 was also validated by the significant impact of philanthropic CSR perception on CSR support (β = 0.594, p < 0.001). As there was a statistically significant impact of perceived philanthropic CSR on corporate reputation (β = 0.420, p < 0.001), H4 was supported. The positive effects of CSR support (β = 0.283, p < 0.001) and corporate reputation (β = 0.260, p < 0.001) on customer citizenship behaviour support H3 and H6. CSR support validated H5 as a significant predictor of corporate reputation (β = 0.242, p = 0.002).

The total indirect effects are presented in Table 2, where perceived philanthropic CSR had a significant total indirect impact on customer citizenship behaviour (β = 0.315, p < 0.001) and corporate reputation (β = 0.144, p = 0.003) through CSR support. Similarly, the total indirect effect of CSR support on customer citizenship behaviour was statistically significant (β = 0.063, p = 0.007). H7 was supported by the specific indirect effects (Table 3), which showed that CSR support mediated perceived philanthropic CSR’s effect on customer citizenship behaviour (β = 0.168, p < 0.001). H8 was supported as the mediating effect of corporate reputation on the connection between perceived philanthropic CSR and customer citizenship behaviour was statistically significant (β = 0.109, p = 0.001).

The moderation analysis (Table 4) rejected H9a and supported H9b, H9c, and H9d. The results indicate that brand preference does not have a moderating effect on the relationships between perceived philanthropic CSR and CSR support (β = −0.096, p = 0.113). On the other hand, brand preference has a moderating effect on the relationships between perceived philanthropic CSR and corporate reputation (β = −0.143, p = 0.010), CSR support and customer citizenship behaviour (β = −0.128, p = 0.027), and corporate reputation and customer citizenship behaviour (β = −0.127, p = 0.002). The relationship between perceived philanthropic CSR and CSR support was moderated by CSR-brand fit (β = −0.091, p = 0.029), supporting H10.

This study examines how customers’ perceptions of brands’ philanthropic activities influence their behaviour, contributing new insights into the growing body of CSR literature. A noteworthy discovery is that even in dire cases of financial distress, a company’s CSR activities continue to ensure consumer citizenship behaviour. This is noteworthy because it demonstrates that consumers are ready to support the company in helpful ways while being fully aware of its cash flow problems. This behaviour aligns with other studies highlighting the emotional and ethical bonds that consumers have with companies that engage in CSR (Ajina et al., 2019; Van Doesum et al., 2021). The results revealed that it is important for companies to determine how to operate in an economically challenging situation.

The findings support all the direct hypotheses (H1–H6), demonstrating that consumers’ perceptions of philanthropic CSR significantly influence customer citizenship behaviour, both directly and indirectly, through CSR support and corporate reputation. These findings underline the importance of particular CSR efforts and their ability to build consumer support and participation, particularly for financially troubled brands, such as Hongxing Erke, where CSR activities can be used strategically to regain trust and legitimacy. Mediation analyses highlight how customer citizenship behaviour is significantly affected by consumer perceptions of philanthropic CSR, which is mediated by CSR support and corporate reputation. The findings show that brands can boost consumer support and reputation through their involvement in philanthropic CSR initiatives, which in turn encourages enhanced consumer citizenship. For financially distressed brands, this underscores the importance of actively engaging consumers in CSR initiatives to foster voluntary behaviours such as brand advocacy and loyalty.

The moderating effects of brand preference and CSR-brand fit suggest that brand attitude and fit strategies are relevant factors. The findings reveal that brand preference and CSR-brand fit play nuanced roles in moderating the impact of CSR initiatives. Although brand preference weakens the relationship between CSR perceptions and corporate reputation, it reduces the impact of CSR support and corporate reputation on customer citizenship behaviour. This means that customers with weaker brand preferences can be more responsive to CSR initiatives, as their support is not preceded by a strong emotional or experiential attachment to the brand. For Hongxing Erke, this indicates that CSR programs serve as effective tools for reaching new or indifferent consumers, as they appear to be more willing to change their perceptions of and actions towards the brand after witnessing its philanthropic activities.

The negative moderating effect of CSR-brand fit suggests that a disconnect between CSR activities and the brand’s identity may bolster the relationship between CSR perceptions and consumer support rather than weaken it. When less alignment exists within a brand’s core identity, consumers may perceive these efforts as genuine and altruistic. This is because low-fit CSR initiatives are less likely to be viewed as self-serving or opportunistic since they do not directly align with the brand’s business activities (Gilal et al., 2023). Such low-fitting CSR activities can appear novel and unexpected, thereby enhancing consumers’ emotional engagement. For example, Hongxing Erke’s donation to flood victims was noticed and even appreciated because it was unprecedented for a brand that was struggling financially. As a result, the brand receives increased consumer support and greater acceptance of its activities.

The rejection of H9a suggests that brand preference does not significantly moderate the relationship between consumers’ perceptions of philanthropic CSR and their support for CSR initiatives. This finding is intriguing and may be explained by the fact that pre-existing brand loyalty overrides CSR perceptions; consumers with strong brand preferences may already hold significant positive support towards the brand, regardless of its CSR initiative. In such cases, CSR perceptions may not significantly amplify support because loyalty is driven more by emotional attachment or positive past experiences with the brand (Overby and Lee, 2006).

The story of the Hongxing Erke serves as an example of how philanthropic CSR can enhance brand reputation and foster customer advocacy, even in difficult economic times. In addition to supporting CSR initiatives, this study improves the understanding of how CSR activities affect consumer behaviour. A brands’ long-term success depends on these behaviours, which include beneficial actions initiated by consumers, such as positive word-of-mouth communication and branding.

This study, which focuses on financially distressed brands, significantly advances the understanding of CSR and how it influences consumer behaviour by presenting new perspectives and expanding multiple theoretical frameworks. The present study uses a combination of theories to investigate how consumer perceptions of philanthropic CSR endeavours influence customer citizenship behaviour. This investigation offers a thorough framework that explains how CSR activities affect consumer attitudes and behaviours by integrating the deservingness theory (Feather, 2006), the theory of reasoned action (Ajzen and Fishbein, 1970), and the legitimacy theory (Suchman, 1995).

Using the deservingness theory, the current study provides new insights into the role that consumer CSR perception plays in financially distressed brands and how it drives positive behaviours. It demonstrates that consumers evaluate a brand’s “deservingness” based on the perceived discrepancy between its CSR investment and its financial condition – specifically, how much the brand appears to be “sacrificing” to contribute to societal causes. This is consistent with a growing body of literature stating that customers are compelled to support businesses that, in their opinion, need assistance during difficult times (Harell et al., 2021; Van Doesum et al., 2021). These findings suggest that consumer perceptions of a company’s charitable efforts can significantly influence their willingness to engage in discretionary supportive behaviours, referred to as customer citizenship behaviour in this study, even when the firm is facing financial adversity.

The results add to the theory of reasoned action by demonstrating that consumers’ perceptions of a brand’s CSR determine their brand support and customer citizenship. This seamlessly connects to the core idea of this theory where dispositions produce intentions that, in turn, cause action (Ajzen and Fishbein, 1970). This study supports to this theory by demonstrating how consumers’ perceptions of CSR positively influence their willingness to support a brand, motivating voluntary brand-supporting behaviours, in line with previous research (Arshad et al., 2021; Wu et al., 2023). The findings also indicate that a low brand preference can increase the correlation between CSR perception and behavioural intention. In the case of the Hongxing Erke, this suggests that CSR efforts were better at enhancing consumer support and citizenship behaviour for people who are neutral to or less loyal to the brand because the firm’s philanthropic efforts are perceived to be needed, as the brand acted purely for the benefit of the public, showing great concern.

By incorporating the legitimacy theory (Suchman, 1995), the current study highlights the importance of aligning CSR initiatives with societal expectations and brand identities. Contrary to expectations, the results reveal that low CSR-brand fit strengthens the relationship between consumers’ perceptions of philanthropic CSR and their support for CSR initiatives. For Hongxing Erke, negative CSR-brand fit posited that CSR initiatives helped restore the brand’s legitimacy by attempting to fulfil the society’s expectations of the brand even when the firm was not in a strong financial position. This questions the traditional belief that low CSR-brand fit is adversely impactful because it weakens the positive effects of CSR on consumer attitudes and behaviours towards the brand (Gilal et al., 2023; Yoo and Lee, 2018). Hongxing Erke’s low-fit philanthropic activity targeting disaster relief was considered more sincere than high-fit ones (such as donations of sports equipment) because it showed concern towards society, which is always not profitable. These findings highlight the importance of ensuring that CSR initiatives are perceived as genuine and impactful, particularly for financially distressed brands that seek to rebuild trust and legitimacy.

In conclusion, by examining the unique dynamics of philanthropic CSR in the context of a financially distressed brand, this study not only confirms but also broadens the application of previous theories. These findings have important theoretical implications, suggesting that CSR initiatives should be viewed as strategic tools for building long-term customer relationships and improving overall company performance (Fatma and Khan, 2023).

This study makes a substantive contribution to the crisis management field that has been insufficiently examined by assessing the importance of CSR during operational distress. Most previous works analysed the benefits of CSR to strong firms regarding reputation (Farooq et al., 2021), but this study illustrates that CSR is a distressed brand’s “crisis catalyst”. Brands that take CSR outside of the context of a benevolent activity can tap into a state of financial desperation and equate it with a moral flag-waving exercise. For instance, Hongxing Erke’s “bankruptcy donation” story allowed the company to leverage sympathy as a negative publicity coin and consequently turned its financial collapse into victory. Managers may develop more effective CSR strategies by focusing on the social and consumer marketing aspects of corporate philanthropy.

To begin with, businesses should recognise that philanthropic CSR activities can boost corporate reputation and customer support even in difficult times. The case of Hongxing Erke demonstrates how genuinely philanthropic CSR activities can touch customer hearts and minds, leading to increased brand support and customer citizenship behaviours (Fatma and Khan, 2023). Managers should consider philanthropic CSR activities as strategic tools to increase consumer trust and brand equity. This may include highlighting financial constraints using transparent communication to emphasise the trade-offs between CSR and profitability and share narratives of employees or stakeholders affected by the brand’s CSR sacrifices to humanise the effort.

Additionally, a company’s CSR initiatives may prioritise CSR-brand fit (Kang and Matsuoka, 2022b). Contrary to conventional strategies, low CSR-brand fit initiatives can enhance authenticity. Customers are more likely to support and behave favourably towards companies whose CSR initiatives they believe are genuine and significant. Companies should diversify their CSR portfolios by engaging in CSR activities unrelated to their core business operations (e.g. a tech company supporting education in underserved communities) and ensuring that CSR initiatives are not perceived as extensions of profit-driven strategies. For example, Hongxing Erke’s disaster relief efforts were distinct from its sports product lines, which reduced scepticism.

Strategic CSR initiatives are recommended to target low brand preference segments. Consumers with weak brand preferences are more responsive to CSR initiatives. Managers should identify neutral or sceptical consumers using data analytics to segment audiences based on brand engagement levels. Messaging should emphasise the societal impact of CSR rather than brand promotion. For instance, Hongxing Erke targeted younger, socially conscious consumers through platforms such as Douyin (TikTok), through which donations went viral. It is also important to share customer-friendly stories and utilise various communication platforms to highlight the benefits of CSR initiatives.

Moreover, managers can create targeted CSR programs by understanding the mediating roles of corporate reputation and CSR support. Firms can focus on programs that are likely to generate strong consumer support and improve their corporate reputations, thereby increasing their overall impact (Kang and Matsuoka, 2022a). For example, philanthropic efforts that address pressing social issues and produce quantifiable results are more likely to generate consumer support and improve corporate reputation. Companies should create participatory CSR programs to involve consumers in CSR decision-making (e.g. voting for causes to support) and offer micro-engagement opportunities such as launching small, frequent CSR actions.

Finally, managers should monitor and evaluate the outcomes of their CSR initiatives. Businesses can improve their impact and strategies by regularly assessing consumer perceptions, support and behaviours in response to CSR initiatives. Understanding the effectiveness of CSR programs using tools such as focus groups, surveys, and social media analytics can guide future research. Real-time sentiment analysis and iterations based on feedback can help companies develop long-term CSR roadmaps.

For financially distressed brands, CSR is more than just a means to enhance their reputation; it is also a tool to mobilise consumers. Managers can transform CSR into a strategic tool for long-term recovery and growth by emphasising low-fit initiatives and sacrificial narratives while engaging consumers directly. These findings fundamentally restructure the role of CSR within the context of brand management and provide a pathway for turning a firm’s weaknesses into positive consumer engagement.

Along with the valuable information, this study also has some important limitations. First, the use of a single sports brand, which skews a particular cultural context, may not have significant external value. To improve and substantiate the generalisability of the findings, further research should include multiple cases within different cultures and industries.

The second limitation stems from the fact that the current study used a cross-sectional design. Longitudinal research may provide better insight into the impact of philanthropic CSR initiatives on consumer behaviour over time. This study is also limited in scope because it focuses solely on philanthropic CSR. Therefore, the different impacts of various CSR initiatives should be explored.

Ultimately, other potential moderators of the relationship between the consumers’ understanding of CSR and purchasing behaviour may include certain consumer values, psychological variables (e.g. personality), and competitive context. With these additional dimensions, a more holistic understanding of consumers’ responses to CSR initiatives can be achieved.

Funding: No funding was received for conducting this study.

Disclosure of potential conflicts of interest: No potential conflict of interest was reported by the authors.

Ethics Declarations: Research does not require assessment of code of ethics in its conducted country (China) and it fulfils the “Criteria for Determination of the Unnecessity of Assessment” for Waseda University Ethics Review Committee: The research only uses (a) information which has already been non-linkable anonymised (i.e. specific individuals cannot be identified and a correspondence table was not created) or (b) information was already anonymised or processed to make it non-distinguishable.

Consent to participate: Informed consent was obtained from all individual participants included in the study.

Author Contributions (CRediT Statement): Yuchen Zhang: Conceptualisation, Data curation, Formal analysis, Investigation, Methodology, Resources, Software, Visualisation, Writing – original draft. Tingyu Hou: Conceptualisation, Writing – review & editing. Hirotaka Matsuoka: Project administration, Supervision, Validation, Writing – review & editing.

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