Should firms invest in CSR? There were many research on effects of CSR on firm performance in the past and found out that CSR, in general, provides unstable outcomes on performance. It is unclear whether CSR improves or undermines firm performance. No firm is the same and not every firm is in the same situation, so there would be a lot of unpredictabilities. But, firms in a competitive market or environment receive more benefits from CSR investment than firms in lower competitive area. In a competitive scene, customers usually prefer firms that provide goods at low prices and other factors. CSR might drive customer’s attention away from pricing and make them focus on the social values of the firm instead, and of course, firms with good reputations to attract more customers.

Basically, CSR could be used as a marketing device to improve a firm’s prestige, which results in more profit. I agree with the author that CSR can have a positive impact on firm performance.  For example, I experience pleasure being a customer of Wells Fargo, knowing their generosity– they promised to donate some amount of their earnings each year. Sometimes, people favor firms that help our society over other firms because it feels like the customers themselves are doing the helping by supporting the firm financially. In conclusion, CSR does not improve every firm, but only ones that are in a competition with other firms.        

Reference: Kemper, Schilke, Reimann, Wang, & Brettel. (2013). Competition-motivated corporate social responsibility. Journal of Business Research, 66(10), 1954-1963.