The Effects of Corporate Social Responsibility on Customers’ Loyalty in Lao PDR

Abstract

Corporate social responsibility (CSR) has become an essential mainstream in research circles at present, especially for organizational business management and has been adopted as long-term strategic plans. It plays a crucial role in espousing robust business operation, moderating the harmful negative effect of environmental degradation and being an integral aspect in promoting social and community activities as well as enhancing people's quality of life. Nevertheless, very few empirical studies focused on the effects of CSR on customers' loyalty in a telecommunication sector and none of empirical evidence have investigated in case of Lao PDR. Hence, this paper empirically investigates on the effects of CSR on customers' loyalty in Lao PDR by employing multiple linear regression model to uncover the relationship between an explained variable and a set of regressor in the estimated model. Empirical findings substantiated a positive effect and statistical significance of philanthropic, environmental and legal responsibility on customers' loyalty, whilst legal responsibility has a weak positive influence on an explained variable and the outcomes also found that ethical behavior is positively affected but statistical insignificance on customers' loyalty. In addition, the paper strongly averred that CSR contributes to increase customers' loyalty, investments in CSR activities helps to reach sustainable business development goals and mitigate the potential adverse impact caused from business operation. More importantly, policy implications provide crucial insights and the fundamental role of CSR initiatives in establishing the innovative marketing strategy, contemporary business management and their survival in the era of high competition.