Ambivalent Impact of Customer Satisfaction on Firm Value in Emerging Markets: The Case of Korea

Abstract

Abstract. Many researchers report that American Customer Satisfaction Index relates significantly and positively to firm value. The purpose of this paper is to examine whether such relation holds in the emerging markets such as Korea. Our preliminary OLS analysis reports that Korean customer satisfaction is irrelevant to firm value. Quantile regressions, applied for further analysis, report that customer satisfaction can be detrimental to firm value if the firm is enjoying the higher kind of value. These results undermine efforts, on the theoretical level, to establish Customer Satisfaction Index as a consolidated firm-value indicator; furthermore, managerial efforts to boost up firm value by managing customer satisfaction lose ground in the emerging markets. This study also corroborates Reinartz and Kumar's (2002) marketing insight that to satisfy customers, make them loyal, is trivial for profitability and firm value in Korea perspective. The practical implication of our finding is that the relation between customer satisfaction and firm value becomes more ambiguous, especially when it is considered in the emerging market contexts. It also provides management with a fresh new insight that they should take prudence when they increase expenses on customer satisfaction since it turned out to be not a "panacea".

Impact of Online Advertisement on Customer Satisfaction With the Mediating Effect of Brand Knowledge

“…This manuscript is informative to investigate the impact of an online advertisement about the products and services on the satisfaction level of the customer, where a sustainable brand knowledge (i.e., perception level of a customer about the brand) plays a mediating role between these two variables (Kim et al, 2017). In Pakistan, consumers shift their behavior toward e-commerce because of the technological influence on their daily transactions (Danish et al, 2016).…”