Does CSR Enhance Young Bank Customers’ Satisfaction and Loyalty in a Developing Economy? The Mediating Role of Trust

The role of corporate social responsibility (CSR) on firm performance is well documented in the literature. Although the majority of the evidence available points to a positive association between CSR and determinants of company performance such as monetary performance, personnel commitment and corporate identity, findings still remain rather inconclusive as negative or no correlation results are also reported. In addition, little is known about how CSR is perceived from a bank customer’s point of view and studies examining its effect on customer satisfaction and loyalty in developing economies are scanty. Drawing insights from the stakeholder and signaling theories, this study examines the effect of CSR on customer satisfaction and customer loyalty. The study also examines the mediating role of trust on these relationships. Data from 348 bank customers in Zambia indicate that CSR positively affects satisfaction and loyalty. It was also established that trust has a significant mediating effect on the relationships. With the increase in complexity and dynamism of today’s business environment banks are advised to be more socially responsible as one way of building trust and customer satisfaction and loyalty.