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Purpose This paper aims to determine what the brand performance consequences of corporate social responsibility (CSR) activities would be during times of recession for well-known brands. Design/methodology/approach Based on signaling theory, this paper investigates if CSR activities serve to signal higher brand value for consumers via perceptions of better quality and greater differentiation, specifically during recessions. This study incorporates a representative longitudinal sample of known US firms for the analyses, which is accomplished through generalized method of moments estimations. Findings The findings empirically demonstrate that CSR initiatives during recessions are actually associated with increased perceptions of brand value. More specifically, during recessions, CSR initiatives such as charitable contributions provide a signal to customers of higher brand quality. Research limitations/implications This study did not control for the costs of doing specific CSR activities that may be less visible to consumers. Practical implications While individual firms or managers may not be able to prevent recessions from happening, they can limit the negative impact of recessions on their performance by engaging in CSR activities (or refrain from cutting back) during these times. Social implications Because CSR initiatives during recessions result in more favorable consumer perceptions of the brand, engaging in CSR aligns both social and managerial interests, owing to the economic gains from CSR investments. Originality/value During times of recession, some critics indicate that CSR may be an unaffordable luxury. On the contrary, this research shows that managers may want to consider CSR activities as a means of increasing the value of their brands, especially during economic recessions.

Many firms use market share to set marketing goals and monitor performance. Recent meta-analytic research reveals the average economic impact of market share performance and identifies some factors affecting its value. However, empirical understanding of why any market share-profit relationship exists and varies is limited. We simultaneously examine the three primary theoretical mechanisms linking firm market share with profit. On average, we find most of the variance in market share’s positive effect on firm profit is explained by market power and quality signaling, with little support for operating efficiency as a mechanism. We find a similar explanatory role of the three mechanisms in conditions where market share negatively predicts profit (for niche firms and those “buying” market share). Using these mechanism insights, we show the value of market share differs in predictable ways between firms and across industries, providing new understanding of when managers may usefully set market share goals. We also provide new insights into how market share should be measured for goal setting and performance monitoring. We show that revenue market share is a predictor of firm profit while unit market share is not, and that relative measures of revenue market share can provide greater predictive power.

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