Can SMEs in the food industry expect competitive advantages from proactive CSR when CSR trade-offs exist?

Purpose The study aims to examine the effects of proactive vs passive environmental corporate social responsibility (CSR) in the context of small and medium size enterprises (SMEs), factoring in the moderating effects of price and the mediating effects of company–consumer identification(C-C identification) on consumer responses. Design/methodology/approach An experiment with general consumer samples was conducted. A randomized 2 (CSR levels: proactive CSR vs passive CSR) × 2 (price as a CSR trade-off: higher price vs lower price) full factorial design was used. Findings The study findings revealed that proactive environmental CSR not only engendered more positive C-C identification but also resulted in more favorable consumer attitudes, stronger supportive communication intent and purchase intent. In addition, when a company demonstrates proactive CSR, consumers' C-C identification is generally positive irrespective of price differences, and in turn, more positive reactions follow. When a company takes a passive approach and offers lower prices, respondents showed significantly less positive C-C identification, and less favorable responses. This indicates that passive environmental CSR programs can potentially backfire, especially when combined with lower prices. This study also shows the important mediating impact of C-C identification on consumer responses. Originality/value This study is one of the few to explore consumer perceptions of and reactions toward the food industry's environmental CSR programs by degree of CSR involvement and price differences in the context of SMEs. This study's findings provide useful information to SME managers and public relations practitioners who work closely with SMEs, allowing them to make informed strategic decisions, especially when they evaluate the extent of their company's commitment to environmentally proactive CSR practices and its communication to consumers.