Question

A recent study has investigated the effect of corporate social responsibility (CSR) on the market value of the firm. This study developed and tested a conceptual framework, which posits that (1) customer satisfaction mediates the relationship between CSR and the market value of the firm, and (2) two firm factors (“innovativeness capability” and “product quality”) moderate the relationship between CSR and customer satisfaction. For this situation, Define the problem, Draw a schematic diagram. Formulate the hypotheses (each in the Null and Alternative).

Answer 1

There will be a relationship between a firm's value and the two factors namely innovativeness capability and product quality. Innovativeness helps the firms to introduce more and more new products into the markets, whcih help them to increase their product portfolio. similary maintaining good quality in their products helps them to acquire more and more customers to them and also retain the old customers with them.

the hypothesis is-

Null Hypothesis: there is a positive relationship between corporate social responsibility on the market value of the firm.

Alternative hypothesis: there is no positive relationship between corporate social responsibility on the market value of the firm.

in this the schematic diagram will be:

CSR----+ Product Quality+

Innovativeness capability---- = market value of the firm.