Corporate Social Responsibility and Customer Loyalty in Food Chains—Mediating Role of Customer Satisfaction and Corporate Reputation

Abstract

The study examined the role of perceived CSR in deriving customer loyalty by exploring direct and mediated effects of corporate reputation and customer satisfaction in Pakistan’s food chains. The data were collected through a survey method from 322 customers of McDonald’s in Pakistan during October 2019 and January 2020. The collected information was then analyzed through the Partial Least Square Structural Equation Modeling (PLS-SEM) technique to test the hypothesized relationships. The results revealed a significant positive impact of perceived CSR on customer loyalty, corporate reputation, and customer satisfaction. Further, customer satisfaction and corporate reputation appeared to mediate the relationship between perceived CSR and customer loyalty.

1. Introduction

To satisfy customers’ needs, companies, including restaurants and hotels, create many social and environmental problems such as air and noise pollution, waste generation, and loss of biodiversity [1,2,3,4]. It has been estimated that food contributes 26% to global GHG emissions [5], and this ratio is expected to grow with the increase in the world population. Stakeholders, including media, NGOs, and customers, require companies, especially food chains, to address their associated social and environmental problems. In response, food chains, including restaurants and hotels, minimize their social and ecological impacts. It has been noticed in the extant literature that product attributes such as price and quality are no longer the main reasons for competitive advantages; instead, corporate social and ethical practices have also appeared to stimulate customer responses [6]. Customers seem to look for observable signals such as CSR activities to determine desirable outcomes (e.g., how caring the company is). Thus, CSR has now become a significant attribute within a marketer’s sphere. With increasingly fierce competition, food chains are struggling to satisfy and sustain customers, and they are now using CSR as a strategic tool to seek customers’ favorable responses [7], including customer satisfaction, corporate reputation, customer loyalty, and positive attitudes towards the company’s brands [8]. Customer loyalty is seen as a pivotal illustration to display their approval for corporate performance [9]. Many scholars have examined the relationship between CSR and customer loyalty with differential results in different contexts such as airlines, hotels, and casinos [1,10,11,12]. Nevertheless, the relationship between CSR and customer loyalty is empirically unclear in the context of food chains [1,13] and thus requires further research.

Specifically, food chains have been criticized for causing the obesity epidemic [14,15] and promoting malnutrition in food containing high sodium, sugar, and fat [16]. Further, foods chains have been accused of targeting vulnerable groups such as children and preschool kids [17], and it has been reported that only 12 out of 3039 possible kid’s meals meet nutrition criteria [17]. Consequently, foods chains have faced massive criticism from various groups, including health professionals, media, and legislators [18]. In response, food chains have addressed these problems by adopting socially responsible initiatives [14,19]. However, the question remains undressed whether customers in different contexts appear to perceive and respond to CSR initiatives in the same way. The extant literature shows that companies in developed countries implement CSR better than companies in developing countries [20]. Since this study is conducted in a developing country, i.e., Pakistan, due to the difference in Pakistan’s social, economic, and cultural contexts, customers’ perceptions of CSR and their responses would not be universally consistent.

Further, this could be different due to the variation in the type of activities undertaken by the food chain in Pakistan. Second, customer responses may also vary depending on the diverse CSR expectations of stakeholders in Pakistan. This research answers this question by investigating the impact of perceived CSR on customer loyalty in foods chains in a developing country context, i.e., Pakistan. This paper attempts to highlight the customer-related benefits of CSR, mainly customer loyalty. There is limited research investigating CSR and loyalty relationships through corporate reputation [21] and customer satisfaction [1]. As a result, we include corporate reputation and customer satisfaction as mediators in this study and address the following research questions:

Do CSR initiatives affect customer loyalty?

Do corporate reputation and customer satisfaction mediate the CSR–loyalty relationship?

This research addresses multiple research gaps. Firstly, this research adopts a comprehensive model to explain the relationship between CSR and customer loyalty through the mediating role of corporate reputation and customer satisfaction, which have rarely been used as mediators simultaneously in the relationship between CSR and customer loyalty. The extant literature, on the one side, shows that companies’ engagement in CSR activities has led to different customer outcomes such as product image [22], customer trust [23], and customer satisfaction [22,24,25]. On the other side, these outcomes have influenced customer loyalty [1,22,26]. Thus, contrary to the findings of various studies [7,10,11,27], there exists an indirect relationship between CSR and customer loyalty. In examining the indirect relationship between CSR and customer loyalty, the extant literature has rarely investigated the role of corporate reputation and customer satisfaction as mediators. Secondly, most of the existing studies on CSR–customer loyalty relationships focused on developed countries such as Spain [1,11,22,25,28] and the USA [7,27]. The studies which were conducted in developing countries focused on Taiwan [10], Macau [12], Korea [29,30], Turkey [31], India [32,33], Thailand [34], Vietnam [35], and China [24] and ignored other developing countries including Pakistan. This study brings insights from the context of Pakistan. Thirdly, existing scholarships studied the role of CSR in accomplishing customer loyalty in the context of airlines [10], hotels [7,11,22,31], casinos [12,27], coffee shops [29], restaurants [30], tourism [34,35], super markets [36], banking [32], and shopping malls [33]. Whether CSR plays an influential role in shaping the CSR–loyalty relationship in food chains has rarely been investigated, particularly in developing countries. This study examines the relationship between CSR and customer loyalty through the mediating role of corporate reputation and customer satisfaction in Pakistan’s food chains.

The remainder of this study is organized as follows: the next section presents a summary of extant literature. The third section presents the theoretical framework of this study and describes the development of hypotheses. The fourth section comprises a discussion on the methodology. The penultimate section presents data analysis and results. The final section includes a discussion, implications, and limitations of this research.

2. Literature Review

The literature on the CSR–loyalty relationship is summarized in

Table 1. Literature review on the CSR and loyalty relationship.

Author	Mediators	Country	Industry	Sample	Analysis	Results
[10]	None	Taiwan	Airline	NA	NA	CSR has Sig (+) with behavioral and attitudinal loyalty
[22]	Customer Trust, Identification, Satisfaction	Spain	Hotels	382 Respondents	SEM	Customer trust, identification, and satisfaction mediates the perceived CSR ↔ loyalty relationship
[12]	Brand Preference	Macau	Casinos	616 Respondents	SEM	Brand preference partially mediates the CSR ↔ loyalty relationship
[11]	None	Spain	Hotels	1921 Respondents	SEM	CSR ↔ loyalty has direct Sig (+)
[29]	Brand identification	Korea	Coffee shops	237 Respondents	SEM	Personal and social brand identification mediates CSR–brand fit ↔ service brand loyalty relationship
[30]	Brand image, trust	Korea	Restaurants	636 Respondents	CFA, SEM	Brand image and trust mediates the CSR ↔ loyalty relationship
[7]	None	USA	Hotels	487 Respondents	SEM	CSR ↔ loyalty has direct Sig (+)
[31]	Corporate Image	Turkey	Hotels	404 Respondents	SEM	Corporate image mediates CSR ↔ loyalty relationship
[28]	Trust	Spain	Hotels	629 Respondents	SEM	Trust mediates CSR ↔ loyalty relationship
[34]	Destination attachment	Thailand	Tourism	127 Business Participants	SEM	Destination attachment mediates CSR ↔ loyalty relationship
[27]	None	USA	Casinos	251 Respondents	SEM	Philanthropic and legal responsibilities have significant affect on loyalty
[35]	Brand Image	Vietnam	Tourism	359 Respondents	SEM	Brand image mediates CSR ↔ loyalty relationship
[24]	Customer Satisfaction	China	Not specified	500 Respondents	CFA, SEM	Customer satisfaction mediates the CSR ↔ loyalty relationship
[25]	Customer Satisfaction	Spain	Banking	1124 Respondents	SEM	Customer satisfaction mediates CSR image ↔ loyalty relationship
[22]	Functional Image, Affective Image	Spain	Hotels	1921 Respondents	SEM	Functional image and affective image mediate CSR ↔ loyalty relationship
[32]	Corporate Branding	India	Banking	430 Respondents	SEM	Corporate branding mediates economic CSR↔ loyalty, philanthropic CSR ↔ loyalty, ethical CSR ↔ loyalty relationships
[33]	Brand Trust and Brand Experience	India	Shopping Malls	354 Respondents	SEM	Brand trust and brand experience mediates CSR ↔ loyalty relationship

CFA: Confirmatory Factor Analysis, SEM: Structural Equation Modeling, NA: not available.

. Most of the existing studies on the CSR–customer loyalty relationship focused on developed countries such as Spain [1,11,22,25,28] and the USA [7,27] and the studies conducted in developing countries mainly focused on Taiwan [10], Macau [12], Korea [29,30], Turkey [31], India [32,33], Thailand [34], Vietnam [35], and China [24] and ignored other developing countries, including Pakistan. Further, existing scholarships studied the role of CSR in accomplishing customer loyalty in the context of airlines [10], hotels [7,11,22,31], casinos [12,27], coffee shops [29], restaurants [30], tourism [34,35], super markets [36], banking [32], and shopping malls [33]. Whether CSR plays an influential role in shaping the CSR–loyalty relationship in food chains has rarely been investigated, particularly in developing countries. The studies on the focal topic used different theories such as social identity theory, self-categorization theory, cognitive theory, equity theory, network theory, economic theory, stakeholder’s theory, and commitment–trust theory to develop the hypothesized relationships. The extant literature mostly used the survey method to collect the data and used structural educational modeling techniques to test the hypothesized relationships [27,33,34,35]. Some of the existing studies did not use any mediators in the CSR–loyalty relationship and found inconsistent results [7,10,11,27]. Meanwhile, the studies which have used mediators mainly focused on customer trust [22,28,30], brand identification [22,29], customer satisfaction [22,24,25], brand preference [12], corporate image [31,32], brand image [7,35], destination attachment [34], C-C identification [22], functional image [22], affective image [22], perceived value, brand trust [33], and brand experience [33] and found them to mediate the CSR–loyalty relationship.

3. Theoretical Model and Development of Hypotheses

The theoretical model of this research demonstrates the mediating role of corporate reputation and customer satisfaction in the perceived CSR–customer loyalty relationship. The hypotheses mentioned in the framework (see Figure 1) of this study are described below.

3.1. Perceived CSR and Customer Loyalty

CSR refers to “the obligation of business to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society” [37]. CSR has emerged from the philanthropy approach to a pure strategic business approach that helps companies successfully gain a competitive advantage [1,38]. Thus, CSR is understood as a strategy to achieve corporate objectives whilst, at the same time, minimizing the negative impacts of corporate actions on the social and natural environment [39]. Customer loyalty refers to customers’ inclination to build a stable and enduring relationship with service providers [40]. This is perhaps the key goal of businesses, and it helps businesses to build a sustainable competitive advantage [41]. Thus, companies, including food chains, attempt to focus on customers’ essential factors to build a loyal customer base. The extant literature has revealed the strategic importance of the CSR concept and reported that CSR appears to form perceptions and behaviors of stakeholders, including customers [7]. Previous scholarships have said that customers prefer to buy products and services from companies involved in CSR activities, which generates positive word of mouth and repeat purchases [28,42]. The linkage between perceived CSR and customer loyalty can be explained through the lens of social identity theory [43]. According to this theory, customers identify themselves with a company perceived as highly socially responsible, then appear to give more value and attach a higher level of commitment, including loyalty with that firm [44]. Empirically, a significant positive relationship has been reported between customers’ perception of CSR actives and customer loyalty in the hotel industry [7,12,45]. Hence, it is proposed that customer-perceived CSR may have a significant effect on customer loyalty.

Hypothesis 1 (H1).

Customers’ perception of CSR has a significant positive effect on customer loyalty.

3.2. CSR and Corporate Reputation

Corporate reputation refers to the combined and collective illustration of a company’s activities held by exterior observers, and that signals a company’s ability to create cherished outcomes for them [1,46]. Corporate reputation is slightly different from the corporate image. Corporate reputation refers to customers’ evaluations resulting from their interaction with a company [47], whereas corporate image stems from customers’ perception of a company’s activities [48]. Therefore, the extant scholarships have identified the corporate image as a determinant of corporate reputation [48]. In light of signaling theory, CSR spreads positive signals to stakeholders, including customers, and generates positive associations in stakeholders’ minds [1]. These associations help companies attain institutional legitimacy [1,49], which, in turn, positively affects corporate reputation [1,50]. In short, CSR sends a signal that a company is socially responsible and takes care of its stakeholders. These signals may, then, be interpreted by customers as signs of a positive image [1,50], which, in turn, will result in a positive corporate reputation [51].

Hypothesis 2 (H2).

Customers’ perception of CSR has a significant positive effect on corporate reputation.

3.3. CSR and Customer Satisfaction

Customer satisfaction refers to customers’ collective assessment of experiences accumulated over time and their interaction with a company (Hanzaee and Sadeghian, 2014). As per stakeholder theory, companies hold themselves responsible to their key stakeholders, including customers [1,50], and appear to consider their interests in their corporate activities [42]. In presumption of these responsibilities, companies attempt to satisfy customers’ needs by providing superior goods and services [1]. It has been reported that the implementation of improved CSR plans and practices results in greater satisfaction with the company [52]. Consequently, it will positively affect customers’ company evaluations [1,52]. Therefore, customers are expected to give more value and positive evaluation to a company committed to better CSR plans and practices [1].

Hypothesis 3 (H3).

Customers’ perception of CSR has a significant positive effect on customer satisfaction.

3.4. Corporate Reputation and Customer Loyalty

Literature regarding corporate reputations suggests that building and sustaining an excellent corporate reputation leads to continuing customers’ involvement in corporate activities [53], resulting in strong customer attachment with the company [54]. Thus, the customers having excellent experience with a food outlet, having a positive corporate reputation, will become more committed to it. Along these lines, a study conducted in the context of hotels in Macau revealed a significant positive relationship between corporate reputation and customer loyalty [55]. Hence, it is proposed that corporate reputation may have a significant effect on customer loyalty.

Hypothesis 4 (H4).

Corporate reputation has a significant positive effect on customer loyalty.

3.5. Customer Satisfaction and Customer Loyalty

The role of customer satisfaction has been noticed in customer loyalty behavior, and it shows the impression of increased customer engagement with the company [9]. More accurately, high levels of customer satisfaction lead to their continuing relationship with a company [56]. The extant literature has reported that happy customers continue to give their business to the same company [1,16], which causes customer loyalty. In the food industry, satisfaction is a strong predictor of customers’ intention to revisit the outlet [26] and helps to seek existing customers’ recommendations and referrals to visit that outlet [57]. Along these lines, a study conducted in Malaysia revealed a significant positive relationship between customer satisfaction and customer retention [58]. Hence, it is proposed that customer satisfaction may have a significant effect on customer loyalty.

Hypothesis 5 (H5).

Customer satisfaction has a significant positive effect on customer loyalty.

3.6. Customer Satisfaction and Corporate Reputation Mediates Perceived CSR–Customer Loyalty Relationship

The literature mentioned above shows that value-added perception contributes to better corporate reputations and customer satisfaction. As a consequence, these perceptions lead to customer loyalty. Given the hypothesized effects of perceived CSR on customer satisfaction and corporate reputation and their impact on customer loyalty, perceived CSR is expected to impact customer loyalty indirectly. Therefore, this postulates that perceived CSR and customer loyalty relationship is mediated by customer satisfaction and corporate reputation. Hence, the following hypotheses are proposed.

Hypothesis 6a (H6a).

The relationship between customer perceived CSR and customer loyalty is mediated by corporate reputation.

Hypothesis 6b (H6b).

The relationship between customer perceived CSR and customer loyalty is mediated by customer satisfaction.

3.7. Customer Satisfaction and Corporate Reputation

The extant literature showed a positive interrelationship between customer satisfaction and corporate reputation. Thus, it should be taken into consideration to propose an integrative model of customer loyalty in the food industry. A study conducted on the customers of an energy supply company in Germany found a significant positive effect of customer satisfaction on customer-based corporate reputation [59]. Similarly, an experimental study was conducted on the causality of corporate reputation and customer satisfaction, and the results showed that customer satisfaction contributes to corporate reputation [59]. Hence, the following hypothesis is proposed.

Hypothesis 7 (H7).

Customer satisfaction has a significant positive effect on corporate reputation.

4. Research Methodology

4.1. Research Method and Sample Description

This research used a survey research method to collect the data from customers of McDonald’s in Pakistan. The collected data was analyzed through the Partial Least Square Structural Equation Modeling (PLS-SEM) technique using Smart PLS-3 to test the hypothesized relationship. The respondents who recently visited McDonald’s were selected through a systematic random sampling technique. The data were collected, through personal visits, from four different cities of Pakistan, including Lahore, Islamabad, Peshawar, and Sahiwal, during October 2019 and January 2020. In the data collection process, 400 questionnaires (100 at each location) were distributed among the customers, and 351 questionnaires were returned, thus, yielding a response rate of 87.75%.

Further, out of 351 questionnaires, 29 were found incomplete and were excluded from the final data analysis process. Thus, this research employed 322 questionnaires in the data analysis process. As per PLS-SEM guidelines, the sample size should be ten times the number of arrows reflected in the theoretical model [60]. The theoretical model of this research contains eight arrows, thus, requires a sample size of 80. The actual sample size (i.e., 322) of this research is well above the requirements. Therefore, this research has an adequate sample size. The sample description is presented in

Table 2. Sample description.

Variable	Category	Frequency	Percentage
Gender	Male	198	61%
	Female	124	39%
	Total	322	100%
Age	21–31 Years	153	48%
	32–41 Years	122	38%
	42–51 Years	30	9%
	Above 52 Years	17	5%
	Total	322	100%
Educational Level	Matriculation	29	9%
	Intermediate	41	13%
	Bachelors	84	26%
	Masters and Above	168	52%
	Total	322	100%
Employment Status	Employed	120	37%
	Self-Employed	80	25%
	Unemployed	22	7%
	Student	100	31%
	Total	322	100%

. Table 2 shows that 61% of the customers who participated in the research are male, and 85% of the respondents are aged below 41 years. Further, 62% and 78% of the respondents are employed and have a qualification of a bachelor’s degree or above, respectively (see Table 2).

4.2. Questionnaire Development

Since Pakistan’s official language is English, the questionnaire was developed in the English language. The questionnaire was developed based on the work of previous authors, notably [11,25,61,62,63]. The questionnaire consists of two sections. The first section consists of classification questions, including gender, age, education, and employment status. The second section consists of items regarding the measurement of CSR, customer satisfaction, corporate reputation, and customer loyalty. All the items were measured on a 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). The measurement of perceived CSR includes 21 items and was adopted from the work of [64,65,66]. Corporate reputation includes five items and was adopted from [67]. Customer satisfaction has five items and was taken from [62,63,68]. Finally, the seven items of customer loyalty were adopted from [69,70,71]. The scale items included in the final questionnaire are shown in

Table 3. Scale items.

Perceived CSR
CSR1: McDonald’s treats its customers honestly.
CSR2: McDonald’s uses customers’ satisfaction as an indicator to improve product/service marketing.
CSR3: McDonald’s makes an effort to know customers’ needs.
CSR4: McDonald’s tries to maximize its profits.
CSR5: McDonald’s tries to ensure its survival and long-term success.
CSR6: McDonald’s contributes money to cultural and social events (e.g., music, sports).
CSR7: McDonald’s is concerned with improving the general well-being of society.
CSR8: McDonald’s always respects rules and regulations defined by law.
CSR9: McDonald’s is concerned with fulfilling its obligations vis-à-vis its shareholders, suppliers, distributors, and other agents with whom it deals.
CSR10: McDonald’s is committed to well-established ethical principles.
CSR11: McDonald’s is concerned with respecting and protecting the natural environment.
CSR12: McDonald’s manufactures eco-friendly products.
CSR13: McDonald’s protects the environment.
CSR14: McDonald’s communicates to its customers its environmental practices.
CSR15: McDonald’s participates in environmental certifications.
CSR16: McDonald’s offers safety at work to its employees.
CSR17: McDonald’s treats its employees fairly without discrimination or abuse.
CSR18: McDonald’s offers training and career opportunities to its employees.
CSR19: McDonald’s offers a pleasant working environment.
Corporate Reputation
CR1: Services offered by McDonald’s are of high quality.
CR2: McDonald’s has consistent quality.
CR3: McDonald’s has an acceptable standard of quality.
CR4: McDonald’s makes me leave a good impression on other people.
CR5: McDonald’s improves my social relations.
Customer Satisfaction
CS1: I’m satisfied with the product and service of McDonald’s.
CS2: My dining experience at McDonald’s has always been very rewarding.
CS3: I’m satisfied with my overall experience with McDonald’s.
CS4: McDonald’s products or services meet my expectation.
CS5: I’m happy that I have bought McDonald’s products.
Customer Loyalty
CL1: I would like to recommend McDonald’s to colleagues who seek my advice.
CL2: I will continue to visit McDonald’s in the future.
CL3: I shall continue considering McDonald’s as my leading restaurant brand in the next few years.
CL4: I would be happy to spend time in search of McDonald’s product information.
CL5: I would love to try McDonald’s new products.
CL6: McDonald’s is my top choice.
CL7: The services of McDonald’s make me feel a sense of security.

.

5. Data Analysis and Results

5.1. Common Method Bias

Harman’s single factor test revealed that a single factor solution explains 38.45% of the total variance, which is substantially below the threshold level of 50%. This shows that common method bias is not severe in this study.

5.2. Construct Reliability and Validity

Measures of Cronbach’s alpha and composite reliability were used to test the study’s reliability. Primarily, the overall sample was assessed and the items having factor loading less than 0.60 were excluded. The Cronbach’s alpha values of constructs ranged from 0.863 to 0.963, and the values of composite reliability ranged from 0.966 to 0.901, which are substantially above the threshold level of 0.70. This shows evidence of reliability. Further, all CRs and average variance extracted (AVE) values are higher than 0.70 and 0.500, respectively, which validates convergent validity (see

Table 4. Reliability and validity measures.

Construct	Cronbach’s Alpha	Composite Reliability (CR)	Average Variance Extracted (AVE)	VIF Values
Corporate Reputation	0.872	0.908	0.665	1.298
Perceived CSR	0.963	0.966	0.600	1.193
Customer Satisfaction	0.863	0.901	0.646	1.283
Customer Loyalty	0.922	0.938	0.682	1.174

).

Discriminant validity was assessed through the Fornell and Larcker and the Heterotrait–Monotrait Method (HTMT), which shows that values of fact-loadings are greater than the cross-loadings, which provide the evidence of discriminant validity (see

Table 5. Discriminant validity measures.

Constructs	Corporate Reputation	Perceived CSR	Customer Satisfaction	Customer Loyalty
Corporate Reputation	0.868
Perceived CSR	0.816	0.823
Customer Satisfaction	0.746	0.775	0.804
Customer Loyalty	0.750	0.753	0.784	0.826

). Further, multicollinearity was assessed by the variance inflation factor (VIF), and the VIF values of each construct are less than 5, providing evidence that the multicollinearity problem does not exist (see Table 4).

5.3. Hypotheses Testing

The hypothesized relationships were tested, and their results are presented in

Table 6. Direct relationships (H1, H2, H3, H4, H5, and H7).

Hypotheses	Std. Beta	Std. Error	t-Value	p-Value	Decision
H1: Percieved CSR -> Customer Loyalty	0.11	0.07	1.75	0.00	Accepted
H2: Percieved CSR -> Corporate Reputation	0.87	0.01	62.20	0.00	Accepted
H3: Percieved CSR -> Customer Satisfaction	0.71	0.07	10.56	0.00	Accepted
H4: Corporate Reputation -> Customer Loyalty	0.60	0.05	13.25	0.00	Accepted
H5: Customer Satisfaction -> Customer Loyalty	0.34	0.05	6.70	0.00	Accepted
H7: Customer Satisfaction -> Corporate Reputation	0.13	0.07	1.71	0.00	Accepted

. The results showed a significant positive relationship between perceived CSR and customer loyalty (β = 0.11, t = 1.75, p = 0.00), customer reputation (β = 0.87, t = 2.20, p = 0.00), and customer satisfaction (β = 0.71, t = 10.56, p = 0.00). Therefore, H1, H2, and H3 are accepted. In addition, a significant positive relationship was seen between corporate reputation and customer loyalty (β = 0.60, t = 13.25, p = 0.00), corporate satisfaction and customer loyalty (β = 0.34, t = 6.70, p = 0.00), and customer satisfaction and corporate reputation (β = 0.13, t = 1.71, p = 0.00). Therefore, H4, H5, and H7 are accepted.

5.4. Mediation Analysis

The results of the mediation analysis are presented in

Table 7. Mediation analysis (H6a and H6b).

Hypotheses	Std. Beta	Std. Error	t Value	p-Value	Decision
H6a: Perceived CSR -> Corporate Reputation -> Customer Loyalty	0.52	0.04	12.65	0.00	Accepted
H6b: Perceived CSR -> Customer Satisfaction -> Customer Loyalty	0.24	0.04	5.73	0.00	Accepted

. The results revealed the mediating role of corporate reputation (β = 0.52, t = 12.65, p = 0.00) and customer satisfaction (β = 0.24, t = 5.73, p = 0.00) as significant. Therefore, H6a and H6b are accepted.

6. Discussion and Conclusions

The study examined the role of perceived CSR in deriving customer loyalty by exploring direct and mediated effects of corporate reputation and customer satisfaction in Pakistan’s food chains. The results showed a significant positive relationship between perceived CSR and customer loyalty. This result is consistent with the findings of [1,7,25]. This finding can be explained with the help of social identity theory, which states that customers may affiliate themselves with companies that promote their social identity. Thus, customers may give significant attention to CSR in their evaluation of the selection of food outlets. This suggests that companies, aiming to build a loyal customer base, need to change the social perceptions of customers by minimizing the social and environmental impacts of their corporate activities. Perceived CSR was also found to have a significant relationship with customers’ satisfaction. This finding is consistent with the results of [1,72]. This finding can be explained with the help of stakeholder theory, which considers customers as critical stakeholders to whom the companies, including food chains, hold themselves responsible [50]. Therefore, companies recognize that customers are affected by their activities. This recognition significantly helps companies, including food chains, improve their social image in consumers’ minds by minimizing their actions’ social and environmental impacts.

The study revealed a significant positive relationship between perceived CSR and corporate reputation. This result is consistent with the findings of previous literature, notably [1,50,73]. According to signaling theory, this result can be attributed to the fact that CSR helps to send affirmative signals of social responsibility to customers that would result in building a positive image [1,50] and improve corporate reputation [1,51] in the minds of consumers. The findings also revealed a significant positive relationship between customer satisfaction and corporate reputation. This result is consistent with the findings of [59,74], who found that corporate reputation contributes to customers’ satisfaction. In addition to the above, customer satisfaction and corporate reputation mediated the perceived CSR–customer loyalty relationship. Although existing research on perceived CSR–customer loyalty in food chains has overlooked the role of these mediators, our findings suggest that food companies invest in CSR initiatives to satisfy customers and foster a positive reputation among stakeholders, including customers.

Focusing on the context of the study, despite Pakistan’s poor economic situation and prevalence of many social problems such as illiteracy, unemployment, poverty, and weak law enforcement, customers in Pakistan are giving value to social and environmental issues in their corporate evaluations and appear to appreciate and reward companies actively engaged in CSR activities. This could be attributed to global awareness about social and ecological problems. Thus, customers in Pakistan appear to show behavior consistent with the behavior in other countries.

7. Research Implications

The findings of this research bring some theoretical and practical implications. Concerning academic contribution, this research highlights the significance of some constructs, including customer satisfaction and corporate reputation, in determining the CSR–loyalty relationship in food chains in developing countries. These constructs have not been explored in detail in the extant literature on CSR–loyalty relationships in developing countries. Thus, this research helps better understand the mechanism impacting CSR and customer loyalty through customer satisfaction and corporate reputation and is perhaps the essential theoretical contribution of this research. Further, this necessitates the development and testing of a comprehensive model that acknowledges that the CSR–customer loyalty relationship is not direct and straight forward, but rather, in line with the extant literature [1,21,75], mediated by numerous variables including customer satisfaction and corporate reputation. This is perhaps the first study to determine the role of CSR in improving customer loyalty in food chains in a developing country, Pakistan.

Concerning practical implications, it is noticeable that CSR initiatives contribute towards positive customer outcomes, including satisfaction, reputation, and loyalty in the food chains. The results show that customers pay great attention to social issues and respond to them more intensively [35]. This suggests that implementation of CSR practices is no longer an option; rather, it has become mandatory in today’s marketplace, and it requires companies, including foods chains, to adopt responsible practices, rather than causing social and environmental problems, to yield favorable customer outcomes, which will consequently result in retention and repeat purchases in the food industry. Thus, CSR activities act as a strategic tool that companies, including food chains, may use to manage their relationship with customers because CSR activities send a positive signal to stakeholders, including customers, and shape their reputational perceptions [76]. Thus, food chains may adopt socially responsible practices to shape customers’ attitudes and behaviors favorably [77,78].

8. Limitations and Future Research Suggestions

This research is not free from limitations. Firstly, the results of this study are based on the data collected from food chains, including McDonald’s in Pakistan; therefore, the results of this study cannot be generalized to other industries, including hotels, airlines, and education. Thus, future research may determine whether customers’ perceptions of CSR activities appear to cause similar customer outcomes in other industries, including hotels, airlines, and education. Secondly, this research focused on one country, i.e., Pakistan, to determine the mechanism of the CSR–loyalty relationship. Therefore, its results cannot be generalized to other countries. This requires future researchers to collect data, particularly from food chains from other emerging economies, to validate the results further. Thirdly, the results of this research are based on cross-sectional data, and, therefore, these results cannot be generalized over time. Thus, future research may incorporate longitudinal data to ascertain the dynamic change in perceived CSR, reputation, satisfaction, and loyalty. Fourthly, this research does not incorporate all the variables mediating the CSR–loyalty relationship; therefore, the role of other variables such as word of mouth, credibility, or trust may be determined as a mediator in future research. Fifthly, this current study does not determine the role of moderating variables in the model. Therefore, future studies may focus on negotiating role of variables, including gender, age, culture, government policy, and market orientation. Finally, the present study considered CSR a composite measure and did not consider its dimensions in the analysis. Therefore, future research may consider dimensions of CSR to determine each dimension’s impact on customer outcomes, including satisfaction, reputation, and loyalty.

9. Conclusions

The study examined the role of perceived CSR in deriving customer loyalty by exploring direct and mediated effects of corporate reputation and customer satisfaction in Pakistan’s food chains. The results revealed a significant positive impact of perceived CSR on customer loyalty, corporate reputation, and customer satisfaction. Further, customer satisfaction and corporate reputation appeared to mediate the relationship between perceived CSR and customer loyalty. The research also highlights some research implications, limitations, and future research suggestions.