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Article
Consumer Ethicality
Perception and Legitimacy:
Competitive Advantages in
COVID-19 Crisis
Gregory Payne1, Alicia Blanco-González2,
Giorgia Miotto3, and Cristina del-Castillo2
Abstract
The article aims to analyze the cause–effect relationship between Brand Ethicality
Perception (CPE), legitimacy and purchase intention during the COVID-19 first wave,
taking into consideration the mediation effect of the country of residence. Data
collection was based on a survey launched during the COVID-19 lockdown in Madrid
and New York. To analyze the established hypotheses and to test the multigroup
analysis, we applied a structural modelling with SmartPLS. The research contributes
to the field of brand management, and specifically of ethical branding, since it will
analyze how stakeholders’ expectations fulfillment is key to build a consistent and
valued brand meaning in crisis’ situations, demonstrating that ethical behaviors are key
for gaining corporate legitimacy and, therefore, for improving business performances.
Keywords
ethics, brand ethicality perception, purchase intention, legitimacy, COVID-19,
strategic management
Introduction
In 2020, the new SARS-like coronavirus, named COVID-19, swept across every
national border, left health care systems collapsed, being compared with the World
War of 1939–1945 in terms of its global impact on every household and business
1Emerson College, Boston, MA, USA
2Universidad Rey Juan Carlos, Madrid, Spain
3Ramon Llull University, Barcelona, Catalonia, Spain
Corresponding Author:
Gregory Payne, 120 Boylston Street, Emerson College, Boston, MA 02116, USA.
Email: gregory_payne@emerson.edu
1016515ABSXXX10.1177/00027642211016515American Behavioral ScientistPayne et al.
research-article2021
2 American Behavioral Scientist 00(0)
(Sneader & Singhal, 2020). Spain and the United States were ones of the most affected
countries since the beginning of the pandemic (McKinsey, 2020). Between middle
March and the end of May, Spain counts more than 236,000 infected people and more
than 27,000 deaths. At least the 35% of these deaths were living in Madrid (Statista,
2020a). New York counted more than 206,000 infected persons and 17,500 confirmed
death and this area was the most highly affected in the United States during that period
(Statista, 2020b). People had to live in a lockdown in their houses, facing very difficult
health, social, and economic situations. During the COVID-19 crisis, people’s lives
changed abruptly and worldwide individuals experienced a decrease in the personal
and family economic conditions, the lockdowns accelerated the adoption of digital
adoption, which drove into new pattern consumption (McKinsey, 2020). According to
several authors, COVID-19 changed everything and it looks like our lives will never
be the same (Grigore et al., 2020). We are getting use to a “new normality,” where
social distance, masks, no travelling, and extreme hygiene are compulsory (World
Health Organization, 2020). Putting the world on an extended lockdown gave every-
one the chance to reassess their priorities; to reevaluate the way we care for the sick
and vulnerable; to reflect on our hectic, consumeristic lifestyles; and to consider if
other more sustainable, democratic, and caring ways of conducting our affairs were
possible (McQueen et al., 2020).
In this new and unexpected environment, companies changed their communication
strategies and messages affecting customers’ perceptions (Xifra, 2020). According to
the “Spring Update 2020” of the Edelman Trust Barometer (Edelman, 2020), people
from all around the world declared that companies have the responsibility to help gov-
ernments in the COVID-19 crisis’ resolution. Firms are expected to provide necessary
products, to protect their employees’ well-being and financial interests, and to support
their smaller suppliers. Companies are expected to behave ethically and work for the
common good.
Consumer behavior has changed and more than the 65% of the population declared
that, during the crisis, they supported brands that they trusted and say that the firms
that prioritized only their economic benefits instead of people well-being will com-
pletely lose their consumers’ trust and loyalty (Edelman, 2020). According to this
report, the number of people worldwide who decided to buy a new brand because they
considered that this firm was more innovative and compassionate on managing the
issues raised by the pandemic, increased on 7%. Besides, also increased the percentage
of consumers that convinced other consumers to stop buying a brand which did not act
properly in response of the pandemic.
We are living in a hyperconnected and transparent world, where consumers may
easily access any kind of information and companies and brands are constantly under
scrutiny (Castells, 2007). In this new environment, costumers “are increasingly
demanding that their favorite brands behave ethically” (Iglesias et al., 2019) and cor-
porate misconduct has negative effect on consumers’ perception toward brands and
their reputation may be damaged forever at the eyes of the society moral judgement
(Brunk, 2012). After misconduct associated with a brand, there is a negative impact on
purchase intentions (Hsu et al., 2012; Mena et al., 2019). The brand choice is not just
Payne et al. 3
based on a brand’s functional and emotional benefits but also on customers’ identifica-
tion with a brand’s ethical positions and views (Edelman, 2020; Kotler et al., 2012;
Porter & Kramer, 2006). According to the institutional approach, brands have an ethi-
cal role that affect how the company itself is socially perceived by the community with
which it interacts either directly or indirectly (Czinkota et al., 2014; Rindova et al.,
2005).
When consumers develop a strong relationship with a brand, due to their associa-
tion with a brand’s values, this link boosts recognition benefits from purchasing the
brand’s products and thus increases brand equity (Iglesias et al., 2019). Besides, ethi-
cal brands acquire legitimacy because they fulfil stakeholders’ moral expectations
since they align with their values and social norms (Deephouse et al., 2017). Legitimacy
is an intangible asset which provide long-term and sustained competitive advantages
for the firm (Bianchi et al., 2019; Czinkota et al., 2014; Miotto, del-Castillo, et al.,
2020; Miotto et al., 2018) and influences purchase intention (Ozdora-Aksak et al.,
2016). Legitimacy is granted when behaviors, values, and beliefs are shared with vari-
ous stakeholders (Blanco-Gonzalez, Diéz-Martín, et al., 2020; Díez-Martín et al.,
2010). To maintain legitimacy, companies need to respond to stakeholders’ different
expectancies and engage in socially responsible and sustainable behaviors (Beddewela
& Fairbrass, 2016; Blanco-González, Miotto, et al., 2020). Ethical brands represent
firms that are able to communicate their commitment and positive impact on the soci-
ety. During the COVID-19 crisis and afterward, these brands are perceived as taking
care of people and planet, and not just of their own profit.
From April 15 to May 25, 2020, we performed a quantitative research, surveying
more than 1,000 people living in Spain and the United States, with the objective of
understanding the public perception on firms’ behavior and the grade of consumers’
acceptability and corporate legitimacy. The results show that people’s expectation on
companies’ contribution during the COVID-19 crisis is high and their perception is
different depending on the analyzed industry and company. A high percentage of
respondent declared that, in future, they will support the ethical and legitimated brands
more: The ones that, during the crisis, fulfilled their expectations and behave more
ethically.
In this article, we specifically analyze and compare data form Madrid and New
York citizens. Generally, people coming from different cultures have a different per-
ception of brands ethicality, legitimacy, and purchase intention (Ford et al., 2005),
therefore, for example, companies manage crisis situation adjusting to values and
beliefs of the different countries (Bowen et al., 2018). The research objectives are
focused on understanding the cause–effect relationship between Brand Ethicality
Perception (CPE), legitimacy, and purchase intention during the COVID-19 first
wave, taking into consideration the mediation effect of the country of residence.
Under this scenario, the research objectives of this article are focused on two main
aspects. First, on understanding the cause–effect relationship between CPE, organiza-
tional legitimacy, and customers’ purchase intention during the COVID-19 first wave
and lockdown, and, second, applying and analyzing the mediating effect of the country
of residence. Besides, we also meant to highlight a shift in consumers’ paradigm
4 American Behavioral Scientist 00(0)
during a worldwide health crisis that affected deeply and suddenly people lives.
Furthermore, we meant to find a relationship with the context of extreme crisis and
uncertainty such as the COVID-19 lockdown.
The research will contribute to the field of brand management, since it will analyze
how stakeholders expectations fulfillment is key to build a consistent and valued brand
meaning (Veloutsou & Guzman, 2017). The research will contribute to the field of
ethical branding, demonstrating that ethical behaviors are key for gaining corporate
legitimacy and, therefore, for improving business performances. Stating that the con-
cept of CPE applied to ethical consumerism is a rather new field (Garanti, 2019) and
it is worthy to be further and deeper analyzed in all its constructs and dimensions
(Brunk & de Boer, 2020; Schamp et al., 2019), and particularly from the consumer
decision-making process approach (Brunk, 2010). This article will contribute to better
understand how brands ethicality may improve consumers purchase intention and,
therefore, became a sustained competitive advantage.
The novelty of the project states on the recent disruptive changes that COVID-19
crisis created and the need of helping firms understand that a positive reaction based
on ethical behavior will contribute to increase customers’ and stakeholders’ support
and that only legitimate companies will survive to this crisis. Socially, demonstrating
that ethical brands are the most successful ones will encourage managers to take deci-
sions not just for the firms’ short-term economic profitability but also for the society’s
common good.
The article is organized as follows: First, we describe a theoretical framework about
the relationship between ethical brands, legitimacy, and purchase intention, then, we
describe the applied methodology and results, and finally, we propose implications,
conclusions, and future research lines.
Ethical Brands, Legitimacy, and Purchase Intention
Companies are constantly assessed by public opinion and individuals scrutinize their
actions employing a moral subjective filter putting them into the categories of right or
wrong and good or bad, applying an ethical judgment to their behavior (Brunk, 2010).
This increased consumers consciousness obliges many companies to introduce corporate
social responsibility (CSR) as a strategic imperative (Schamp et al., 2019) and a built-in
strategy (Carroll & Buchholtz, 2014). Aware of the lack of consensus in defining this term
(Brunk, 2012; Carroll & Buchholtz, 2014; Crane et al., 2008; Garriga & Melé, 2004). We
consider CSR as an umbrella concept that defines organizational management based on
business ethics rules and principles (Carroll & Buchholtz, 2014; Crane et al., 2008;
Dahlsrud, 2008; Matten & Crane, 2005; Salzmann et al., 2005; Strand, 2013). CSR relates
to the decision-making process to assess, and maximize the positive impacts, while mini-
mizing the negative ones, to all stakeholders from social, environmental, and economic
perspectives (Carroll & Buchholtz, 2014; Miotto et al., 2018). In this definition of CSR,
we include the ethical dimension of organizations, involving respect for stakeholders’
interests, human rights, and the environment, according to a global and long-term vision
(Aguinis & Glavas, 2012; Carroll & Buchholtz, 2014; Crane et al., 2008).
Payne et al. 5
The term ethics refers to a set of moral norms, principles, or values that guide
people’s behavior (Sherwin, 1983). Moral philosophy applies two different approach
to describe ethics: the deontology theory that considers a nonconsequentialist effect
that guides evaluations and the teleology theory that represents a consequentialist
approach to moral judgment (Brunk, 2012; Crane & Matten, 2007; Delgado-Alemany
et al., 2020). According to the normative moral theory of deontology, inspired by the
German philosopher Immanuel Kant, corporate ethics depends only from superior
defined norms and rules, independently from the caused consequences of their effect
(Clement, 2006). The teleological perspective evaluates not only the good or bad of an
action by itself but its moral judgement depends on the effects and positive, negative,
or neutral impacts that it may cause. In business ethics, the final assessment considers
the trade-offs between increasing benefits and reducing harm for all parties affected
(Crane & Matten, 2007). The deontological approach is focused on the origin of the
individual behavior, the teleological one is focused on the social impact on the society
(Brunk, 2012; Delgado-Alemany et al., 2020). An individual’s moral judgments may
be a mix of both deontological norms and rules and teleological considerations of
effects and impacts (Wang et al., 2016).
Therefore, ethics is the pillar of the responsible and sustainable corporate manage-
ment and governance. Ethics is the guiding principle of CSR and it reflects on the
brand image, reputation, and perception (Miotto & Youn, 2020). According to (Brunk,
2012, p. 551): “How un/ethical a company is perceived in conducting its business is
inherently linked to its overall reputation and its ability to stay competitive in the mar-
ketplace.” Consumers’ subjective beliefs and un/ethical perceptions act as sources of
attitude formation and they influence consumers’ purchase intentions (Das et al.,
2019). In this line, we introduce the concept of ethical brands as the ones those behave
with integrity, accountability, responsibility, and respect toward stakeholders (Iglesias
et al., 2019). Ethical brands provide products and services characterized by a system
of production, exchange, and management that respect providers, producers, commu-
nities, consumers, and the environment (Miotto & Youn, 2020). This system is based
in economic profitability, people-to-people connections, social justice, and environ-
mental sustainability (Szmigin et al., 2007).
Ethical brands engage in corporate sustainability practices, support stakeholder’s
interests, and provide a competitive advantage (Bianchi et al., 2019; Blanco-Gonzalez,
Diéz-Martín, et al., 2020; Iglesias et al., 2019). The integrity and ethicality of these
brands fulfill stakeholders’ ethical expectations (Porter & Kramer, 2011), meet soci-
ety’s moral values (Garanti, 2019), satisfy the consumer’s need for self-identity and
self-expression (Das et al., 2019), build positive brand image and equity (Iglesias
et al., 2019), lead to positive feelings and emotions toward the company (Garanti,
2019), enhance consumers’ trust (Swaen & Chumpitaz, 2008), improve financial per-
formance (Luo & Bhattacharya, 2006), improve quality perception (Chernev & Blair,
2015), increase purchase intention (Bianchi et al., 2019; Szmigin et al., 2007), and
decrease the possibility to switch to another unethical option (Phung et al., 2019).
Ethical brands consider that, if they make decisions which are good for the public,
these are going to be good for the firm as well (Romani et al., 2016), since they will be
6 American Behavioral Scientist 00(0)
the ethical alternative which will fulfil the ethical, personal, and individual choice
(Garanti, 2019). Companies actively seek to link their products to ethical attributes to
improve their competitive position, build brand equity, or directly drive more sales
(Schamp et al., 2019). Construing a firm as a responsible and ethical brand provides
increased awareness, satisfaction, trust, and loyalty (Ajina et al., 2020).
Actually, consumers demand for ethically produced and sold products and ser-
vices is at rise, converting ethical purchase in an important trend (Garanti, 2019;
Govind et al., 2017; Schamp et al., 2019). By making an ethical purchase decision,
consumers identify themselves and project their altruistic and positive biosphere
value orientation (Yoganathan et al., 2019). People are moved to a moral obligation
to help and this compelling reason to act foster ethical consumerism as a materializa-
tion of their altruistic and ethical orientation (Andersch et al., 2019). When purchas-
ing ethical brands, consumers take an active role in shaping a better world and
becoming responsible and sustainable consumers (Fuentes & Sörum, 2019).
Nevertheless, it must be said that ethical purchase intention does not always convert
into actual brand choice and purchase (Miotto & Youn, 2020). Even if several studies
demonstrate that CPE affects the purchase intention positively (Bezençon & Etemad-
Sajadi, 2015), there is still a gap in understanding the relationship between the ethical
brand perception and the positive purchase behavior (Carrington et al., 2016; Longo
et al., 2019; Szmigin et al., 2007). Brand familiarity and an actual good reputation
increase the option to purchase intention when looking for an ethical alternative
(Schamp et al., 2019). Due to the negativity bias, negative information is much more
powerful than the positive one, especially because mainstream media and third-party
social media easily expose more companies’ misconduct and negative evidence than
their CSR practices (Schamp et al., 2019).
Brunk (2010) defines the six domains of CPE that can influence ethical perceptions
of a company or brand and, therefore, the purchase intention are as follows: consumer
(pricing, labelling, or advertising); employees (labor right respect, discrimination, or
health); environment (pollution, recycling, or animal protection); local community
and economy (positive and negative impacts of business and production processes in
the nearby community); business community (accounting and reporting, competitive
market rules, or corruption); and overseas community (exploitation of labor and natu-
ral resources, human rights, or relationship with local governments).
According to the theory of planned behavior (Ajzen, 1991) and the general theory
of marketing ethics (Hunt & Vitell, 1986) information about the ethicality of brands
and companies influence consumers attitudes and judgment, including the purchase
intention (Govind et al., 2017). Ethicality of the brand can relate to a stakeholder-
focused strategy, and the positive relationship between ethicality of a brand and brand
trust, can result in increasing brand sales and performance (Mena et al., 2019).
Considering the performed literature review about the relationship between ethics and
consumer behavior, the following hypothesis is proposed:
Hypothesis 1: Consumer perceived ethicality positively and significantly affects
the consumers purchase intention.
Payne et al. 7
According to (Suchman, 1995, p. 574), corporate legitimacy is “a generalized per-
ception or assumption that the actions of an entity are desirable, proper, or appropriate
within some socially constructive system of norms, values, beliefs and definitions.”
Corporate survival is significantly improved by demonstrations of conformity to the
norms and social expectations within which the corporation operates (Ashrafi et al.,
2020; Díez-Martín et al., 2021; Maignan & Ferrell, 2004). Through the fulfillment of
stakeholders needs, organizations acquire legitimacy which provides them with an
easier and more sustained access to the necessary resources to survive (Díez-Martín
et al., 2013; Díez-Martín et al., 2020).
Legitimacy provides sustained competitive advantages which increase their options
to grow and to improve future performance (Li et al., 2016; Miotto, del-Castillo, et al.,
2020). Companies need to respond to stakeholders’ expectancies and engage in socially
responsible and sustainable behaviors, explicitly expressing their ethical behavior
(Beddewela & Fairbrass, 2016; Lamberti & Lettieri, 2011). Ethical brands are consid-
ered legitimated since they behave with integrity, accountability, responsibility, and
respect toward all the stakeholders (Ajina et al., 2020; Iglesias et al., 2019). According
to these arguments, we define the next hypothesis:
Hypothesis 2: Consumer perceived ethicality positively and significantly affects
the corporate legitimacy.
Legitimacy of ethical brands increases purchase intention in several industries (Guo
et al., 2014) and, especially, when the perception of ethicality is based on trust and trans-
parency and when the mutual benefits are explicit (Miotto & Youn, 2020). The positive
perception of the brand’s value and ethical behavior improve legitimacy and, therefore,
the purchase intention (Lee & Shin, 2010). If value creation is not perceived as mutually
beneficial for all stakeholders, legitimacy is not guaranteed and the competitive advan-
tage is not sustained (Freudenreich et al., 2020). Moreover, legitimacy is directly related
with the organizations’ capability to fulfill customer expectations and values (Díez-
Martín et al., 2021). It is achieved when an organization performs based on moral or ethi-
cal values which overlap with its stakeholders expectancies (Díez-Martín et al., 2021).
Based on these statements, we propose this hypothesis:
Hypothesis 3: Corporate legitimacy positively and significantly affects the con-
sumers purchase intention.
Cultural and social context influences individuals’ values, attitudes, and behavior
(Bowditch et al., 2007). National culture has a relevant role in defining cultural values and
determining ethical attitudes (Christie et al., 2003) since perception about what is wrong
or right depends on the cultural and environmental context of each region (Adler &
Harzing, 2009). Ferrell and Gresham (1985) considered that individuals’ decision-making
process is influenced by inherent factors such as nationality. Thus, differences in the per-
ceptions of ethics as well as in behavioral patterns can be identified between people from
different countries (Hood & Logsdon, 2002). In fact, many authors have explored the
8 American Behavioral Scientist 00(0)
effect of cultural factors on ethics’ perceptions, highlighting differences between the
United States and Spain in the perception of ethical values (Alas, 2006).
In the past few months, several studies have been performed to understand how the
different countries were affected economically and socially by the pandemic and there is
a consensus about that there was an homogeneous reaction between the citizens of the
Western Countries since policy makers adopted very similar measures such as lockdowns,
economic aids, shop and restaurants opening restrictions, and so on (Kraus et al., 2020).
Nevertheless, we could not find specific research about the relationship between CPE,
legitimacy, and purchase intention during the COVID-19 crisis in different countries.
Therefore, to test this comparison, we proposed the following hypothesis:
Hypothesis 4: The country of origin moderates the relationship between consumer
perceived ethicality and consumer purchase intention.
Hypothesis 5: The country of origin moderates the relationship between consumer
perceived ethicality and corporate legitimacy.
Hypothesis 6: The country of origin moderates the relationship between legitimacy
and consumer purchase intention.
To better clarify the research model that relates the three constructs of CPE, legiti-
macy, and purchase intention, we design the model showed in Figure 1.
Sample and Methodology
Research Setting and Data Collection
The considered research setting for this analysis were New York City (the United
States) and Madrid (Spain). These two cities have in common several conditions that
Figure 1. Proposed model.
Source. Own elaboration.
Payne et al. 9
we considered very important as a sample to make a comparison between two different
environments as the American and the Spanish. Both cities experienced a strict lock-
down between March 2020 and June 2020 to decrease the spread of the COVID-19
virus (Mervosh et al., 2020). Both cities were the most affected in their respective
countries in terms of number of infected people and death. According to the U.S.
Department of Health, between March and June, New York counted more than 206,000
infected persons and 17,500 confirmed death and this area was the most highly affected
in the United States during that period (Statista, 2020b). At the same time, Spain
counted more than 236,000 infected people and more than 27,000 deaths, where at
least the 35% of them were living in Madrid area (Statista, 2020a). Therefore, these
two cities were selected since they suffered similar consequences due to the pandemic,
being respectively the focus of the contagious in their countries. Besides, these two
cities are the economic capital of their countries, having both a high population density
and daily concentration of people circulation. In both cities, the governments applied
measures to try to reduce the impact of the pandemic which had relevant social and
economic consequences, however, the type of policies applied differ and affected citi-
zens as well as companies in a diverse manner. Therefore, we considered interesting to
compare the citizens’ perceptions on the role that companies had during this crisis as
well as to analyze how their legitimacy levels have changed during this period and
how it affected the ethicality perception and the purchase intention.
The data collection was based on a survey that included several questions regarding
companies’ responsible behavior during the COVID-19 lockdown, the impact on citi-
zens’ future consumption habits and the legitimacy perception in Madrid and New
York. The number of effective responses were 379 for Madrid and 650 for New York
(Table 1). For the Madrid data collection, a survey was sent directly to a database of
contacts, while for New York data was collected from the Amazon Mechanical Turk
(MTurk) online panel. Amazon MTurk is a crowdsourcing market to facilitate data
collection, where researchers place their projects and anonymous workers participate
in projects for monetary incentives (Kees et al., 2017). MTurk is a web-based data
source that allows researchers to recruit demographically diverse subjects and collect
good-quality data (Kees et al., 2017; Paolacci & Chandler, 2014). During the COVID-
19 pandemic, MTurk provided the opportunity to collect a large nationwide sample in
a relatively short amount of time, facilitating timely examination of the initial impact
of the COVID-19 pandemic in the United States (Tull et al., 2020).
Measurement and Methodology
The considered constructs were measured through adapted items from existing scales
as well as from the content of previously developed research on the field (Table 2).
Besides, we customized some questions adapting them to the COVID-19 lockdown
context, taking into consideration the conclusions of the “Spring Update 2020” of the
Edelman Trust Barometer (Edelman, 2020) which specified that the main consumers’
concern around the companies ethical responsibilities during the lockdown were
focused on companies working for solving the health global crisis, companies
10 American Behavioral Scientist 00(0)
protecting the health of their employees, companies taking care not just about their
profit but working for the common good, and the society well-being. Respondents
were asked to reply considering their consumer habits.
Table 2. Measurement Instrument.
Factor Item Description
Brand ethicality
perception
ETHIC01 Are they fulfilling the health requirements?
ETHIC02 Are they an example of how companies should be behaving in
other countries under this situation?
ETHIC03 Are they honest?
ETHIC04 Are they responsible with their actions?
ETHIC05 Do their actions represent benefits for society?
ETHIC06 Considering the health emergency. Are they fulfilling the law?
ETHIC07 Are they helping their employees to fulfill the law?
Legitimacy LEG01 In general terms . . . is your perception regarding companies
and their role in this crisis acceptable and appropriate?
Purchase
intention
INTENC01 Will your perceptions about companies’ behavior during this
crisis affect your purchase decisions in the case of those
companies that have not behaved properly?
INTENC02 Will the origin of products affect your purchase decisions? For
example, made in China, made in Bangladesh, made in Spain
Table 1. Technical Specifications of the Study.
Population universe Spanish and American citizens
Sampling technique Probabilistic standardized by population and regional structure
Method of collecting
information
Auto-administered online surveys
Person surveyed Resident population in Madrid and the state of New York with age
more than 18 years
Sample size Madrid = 379
• Age: 18-25 = 30.9%; 26-35 = 26.3%; 35-45 = 18.8%, 46-55 =
20.9%; >56 = 3.1%
• Gender: female = 50.6%; male = 49.4%
• Profession: student = 27.8%; employed = 58.4%; unemployed
= 7.8, other = 5.9%
New York = 650
• Age: 18-25 = 20.09%; 26-35 = 38.9%; 35-45 = 20.8%, 46-55 =
16.9%; >56 = 3.3%
• Gender: female = 47.6%; male = 52%; other = 0.4%
• Profession: student = 13%; employed = 66.1%; unemployed =
16.1, other = 12.4%
Dates of information
collection
From the April 17 to the May 30, 2020
Payne et al. 11
We applied a 5-point Likert-type scale for their measurement in the survey with 0
referring to strongly disagree and 5 referring to strongly agree. To measure CPE, we
used an adapted scale considering the research carried out by several authors and
tested in previous research (Brunk, 2012; Brunk & de Boer, 2020). To measure legiti-
macy, we considered the work developed by several authors (Alexiou & Wiggins,
2019; Blanco-Gonzalez, Miotto, et al., 2020; Chung et al., 2016; Deephouse et al.,
2017; Miotto, del-Castillo, et al., 2020). Finally, regarding purchase intention, we
were inspired by the research performed by Hsu et al. (2012) and Phung et al. (2019).
To analyze the established hypotheses and to test the multigroup analysis (MGA), we
applied a structural modelling with SmartPLS. This technique was chosen because it is
a strong method of analysis (Chin et al., 2003) that offers adequate advantages to develop
this research (Sarstedt et al., 2011) since this technique supports MGA (Hair, Sarstedt,
et al., 2017; Henseler et al., 2016; Sarstedt et al., 2011). Following (Hair, Hult, et al.,
2017), we considered that the use of partial least squares structural equation modeling
(PLS-SEM) was more suitable than the CB-SEM for this research because PLS-SEM is
mostly used for predictive causal analysis, where the explored issues are complex and
the existing theoretical knowledge about them is relatively scarce (Hair et al., 2014).
CB-SEM is a methodology more suitable when the research objective is theory testing,
theory confirmation, or comparison of alternative theories. Furthermore, in the proposed
research model, reflective and formative constructs were considered, therefore, PLS-
SEM was the best tool option. The samples of 650 and 379 considered for our analysis
are appropriate since previous studies have identified a sampling threshold for PLS-
SEM of 100 subjects (Reinartz et al., 2009).
Data Analysis and Results
Descriptive Analysis
We carried out a descriptive analysis to understand the values of the considered vari-
ables measuring citizens’ perceptions on the brands’ ethical behavior, legitimacy, and
purchase intention (Table 3). The results show the different factors and the corre-
sponding items with their mean and standard deviation obtained through the analysis
of the data collected from citizens of Madrid and New York.
The results indicate that the average value of the considered variables (brand ethi-
cality perception, legitimacy, and purchase intention) is relatively similar in Madrid
and New York. In Madrid, the average value of brand ethicality perception is 3.3, for
legitimacy 3.2, and for purchase intention 3.5 over 5. In New York, the results are 3.4
for brand ethicality perception, legitimacy, and purchase intention over 5.
Assessment of Measurement Model and Invariance Measurement
Across Groups
The reliability and validity of the measurement model was tested and is presented in
Table 4. For the reflective items forming ethical brand, all the Cronbach’s alphas are
12 American Behavioral Scientist 00(0)
Table 3. Descriptive Analysis.
Factor Item
Madrid (Spain)
New York (The United
States)
Mean
Standard
deviation
Average
factor value Mean
Standard
deviation
Average
factor value
Brand ethicality
perception
ETHIC01 3.325 1.136 3.279 3.394 1.062 3.374
ETHIC02 2.987 1.269 3.252 1.118
ETHIC03 3.098 1.211 2.984 1.186
ETHIC04 3.253 1.206 3.497 1.157
ETHIC05 3.367 1.226 3.451 1.052
ETHIC06 3.567 1.199 3.647 1.040
ETHIC07 3.359 1.182 3.391 1.085
Legitimacy LEG01 3.182 1.205 3.182 3.368 1.058 3.368
Purchase intention INTENC01 3.641 1.278 3.545 3.700 1.101 3.398
INTENC02 3.449 1.525 3.096 1.432
Table 4. Measurement Model Reliability and Validity.
Factor Item Weights/loadings tVIF CA CR AVE
Madrid
CPE ETHIC01 0.789 31.535 0.917 0.934 0.669
ETHIC02 0.864 55.593
ETHIC03 0.848 44.804
ETHIC04 0.875 49.537
ETHIC05 0.730 20.628
ETHIC06 0.772 30.993
ETHIC07 0.837 45.620
Legitimacy LEG01 1.000 1.000 1.000 1.000
Purchase intention INTENC01 0.010 0.036 1.279
INTENC02 0.535 2.349 1.207
New York
CPE ETHIC01 0.811 48.021 0.894 0.917 0.613
ETHIC02 0.810 46.384
ETHIC03 0.822 56.914
ETHIC04 0.722 24.842
ETHIC05 0.734 29.685
ETHIC06 0.745 32.184
ETHIC07 0.827 54.062
Legitimacy LEG01 1.000 1.000 1.000 1.000
Purchase intention INTENC01 0.170 0.635 1.409
INTENC02 0.949 7.841 1.072
Note. VIF = variance inflation factor; AVE = average variance extracted; CPE = brand ethicality
perception; CA = Cronbach’s alpha; CR = composite reliability.
Payne et al. 13
presented, and they meet the required values of 0.70 (Nunnally & Bernstein, 1994).
The composite reliability results are appropriate since they are all over 0.60 (Bagozzi
& Yi, 1988). When considering the average variance extracted values, over 0.50 are
considered acceptable (Fornell & Larcker, 1981). Furthermore, the standardized load-
ings of the reflective items are presented as well as their significant value (p < .01)
which shows that they were meaningfully linked to their respective variable. Regarding
the formative variable of purchase intention, the collinearity (variance inflation factor
[VIF]) value indicates every item is under the correct level of VIF < 5 (Hair et al.,
2014). The standardized weights are shown as their significant values (p < .01), which
indicates that one of purchase intention’s formative item is significant, while the other
is not, having a t value under 2 for both Madrid and New York. However, since the
loading of this item was high (over 0.50), it was maintained as valid (Hair et al., 2014).
Table 5 shows the results regarding the discriminant validity applying the hetero-
trait–monotrait ratio of correlations method which presents that every ratio was lower
than 0.85 (Henseler et al., 2015). Thanks to all these fulfilled prerequirements, we
consider that the model is accepted. We concluded that the proposed model offers
appropriate evidence of reliability, convergent, and discriminant validity (Table 5) for
the reflective constructs as well as in terms of collinearity and weight-loading relation-
ship and significant levels for the formative construct.
To develop MGA and to compare the path coefficients between citizens’ percep-
tions in Madrid (Spain) and New York (USA), the acceptability of the models as well
as the measurement invariance have to be evaluated (Hair et al., 2011; J. Henseler
et al., 2015). To fulfill this requirement, we applied the measurement invariance of
composite method proposed by Henseler et al. (2016) was applied. Measurement
invariance of composite method includes three steps: (a) the configural invariance
assessment, (b) the establishment of compositional invariance assessment, and (c) the
assessment of equal means and variances. Table 6 shows partial measurement invari-
ance for both groups, thus, the analysis of the MGA’s group differences using the
results from PLS-SEM can be applied (Henseler et al., 2016).
Assessment of the Structural Model and Multigroup Analysis
The results confirm the proposed Hypotheses 1 and 2 showing the relationship between
ethicality brand perception and legitimacy (Table 7). Nevertheless, Hypothesis 3 is not
confirmed, since results show that, in this situation, legitimacy does not have a posi-
tive impact on the purchase intention.
Table 5. Discriminant Validity (Heterotrait–Monotrait Ratio of Correlations).
Factor
Legitimacy
Madrid New York
Brand ethicality perception .829 .778
14
Table 6. Results of Invariance Measurement Testing Using Permutation.
Constructs
Configural
invariance
Compositional
invariance
PMI
Equal mean assessment Equal variance assessment
FMIC = 1 CI Diff CI Equal Diff CI Equal
Brand ethicality perception Yes 1.000 [1.00, 1.00] Yes –0.103 [–0.14, 0.13] Yes 0.265 [–0.19, 0.16] No No
Legitimacy Yes 1.000 [1.00, 1.00] Yes –0.166 [–0.14, 0.13] No 0.261 [–0.16, 0.14] No No
Purchase intention Yes 0.746 [0.69, 1.00] Yes 0.046 [–0.13, 0.13] Yes 0.186 [–0.15, 0.14] No No
Note. PMI = partial measurement invariance; FMI = full measurement invariance.
Payne et al. 15
To develop the MGA, the parametric test was used (Hair, Hult, et al., 2017), where
path coefficient differences lower than 0.05 represent significant differences between
the considered groups. The Henseler’s boostrap-based MGA (Reinartz et al., 2009),
and the Permutation test (Chin, 2010) were the nonparametric methods applied, since
these two techniques are the most conservative ones for PLS-SEM to assess differ-
ences between groups. For the Henseler MGA method, a p value of differences
between path coefficients lower than .05 or higher than .95 indicates at the 5% level
significant differences between specific path coefficients across two groups (Hair,
Hult, et al., 2017; Reinartz et al., 2009), whereas for the permutation test differences
are only at the 5% level significant, when the p value is smaller than .05.
The three methods used for the MGA support the same conclusions. This consis-
tence provides a multimethod confirmation of the obtained results (Table 8). The
results demonstrate that no significant differences appear between the perceptions of
the citizens in Madrid and New York when considering the relationships between the
analyzed variables. Hypotheses 4, 5, and 6 are rejected.
Discussion and Implications
During the COVID-19 crisis, people’s lives changed and the “new normal” drove into
new pattern consumption (McKinsey, 2020). During the first wave of the pandemic,
Table 7. Hypotheses Testing.
Hypotheses
Madrid New York
βtβt
H1: CPE–Purchase intention .248 2.010 .191 2.343
H2: CPE–Legitimacy .797 32.987 .740 28.355
H3: Legitimacy—Purchase intention .044 0.430 .055 0.596
Madrid: legitimacy R2 = .63, Q2 = 0.63, purchase intention R2 = .16, Q2 = 0.12; New York:
legitimacy R2 = .55; Q2 = 0.54; purchase intention R2 = .16; Q2 = 0.12
Table 8. Hypotheses Testing MGA.
p-Value differences
Moderating effect
hypotheses
Path coefficient
difference
Parametric
test
Henseler
MGA
Permutation
test Supported
Hypothesis 4: CPE–
Purchase intention
0.017 0.902 0.886 0.872 No, No, No
Hypothesis 5: CPE–
Legitimacy
0.057 0.140 0.111 0.106 No, No, No
Hypothesis 6: Legitimacy–
purchase intention
–0.011 0.937 0.927 0.929 No, No, No
Note. MGA = multigroup analysis; CPE = Brand Ethicality Perception.
16 American Behavioral Scientist 00(0)
long months of lockdown gave people the chance to reassess their priorities, to reflect
on our consumeristic habits, and to consider new and more sustainable and responsible
ways of buying (Grigore et al., 2020). In this new and unexpected environment, com-
panies changed their communication strategies and messages affecting customers’ per-
ceptions on their ethical behavior (Xifra, 2020).
The results of our research confirm the theoretical literature review that states that,
lately and also specifically during the lockdown, companies are expected to behave
ethically and work for the common good (Edelman, 2020; Iglesias et al., 2019; Miotto
& Youn, 2020). The results confirm that consumers’ demand for ethical brands is at
rise, converting ethical purchase in an important trend (Garanti, 2019; Govind et al.,
2017; Schamp et al., 2019). The ethical purchase decision is an act where consumers
identify themselves and project their altruistic and positive biosphere value orientation
(Yoganathan et al., 2019). Results confirm that a high ethicality in brand perception
increases the brand purchase intention, since consumers take an active role in shaping
a better world and becoming responsible and sustainable citizens (Fuentes & Sörum,
2019).
At the other side, results show that during the lockdown brands which were consid-
ered as ethical were also perceived as legitimate. These results confirm the theory that
ethical brands enjoy a higher level of legitimacy, since they fulfill stakeholders
demands, reflexing their values and having a positive impact on the society (Czinkota
et al., 2014). On the contrary, results do not confirm the positive relationship between
legitimacy and purchase intention. This discrepancy may be explained by the fact that
legitimacy is an intangible asset which provide long-term and sustained competitive
advantages, but not a quick change in the consumer behavior (Bianchi et al., 2019;
Czinkota et al., 2014; Miotto, del-Castillo, et al., 2020). Legitimacy influences pur-
chase intention (Ozdora-Aksak & Atakan-Duman, 2016), but its positive impact on
the actual buying action may take several time before being explicit and tangible.
Research findings confirm a positive relationship between CPE, legitimacy, and
purchase intention during the lockdown, with no relevant differences between the two
analyzed cities. In both cases, the positive perception of the brand role in helping with
the resolution of huge global issues related with the pandemic increases brand legiti-
macy and purchase intention. The homogeneous reactions of two different countries’
citizens confirms a recent research performed by several authors that concludes that
during the COVID-19 pandemic, the economic and social impact and reactions were
very similar in Western Countries due to the alignment of policy-makers decisions
(lockdowns, economic aids, restrictions, etc.; Kraus et al., 2020).
Implications for brand management highlight that, since stakeholders expectations
fulfillment is key to build a consistent and valued brand meaning (Veloutsou &
Guzman, 2017), shape a brand based on people values increases legitimacy and, there-
fore, purchase intention. Firms that are managed ethically, in an environmentally sus-
tainable and socially responsible manner are more likely to design brands that
consumers are more willing to support. Consumers who buy ethical brands are respon-
sible and sustainable, and this is confirmed in a situation of health crisis. As per
Bezençon and Etemad-Sajadi (2015), this research demonstrates that CPE positively
Payne et al. 17
affects purchase intention. Moreover, it incorporates a variable of great interest in the
academic field: organizational legitimacy (Czinkota et al., 2014; Deephouse et al.,
2017; Lee et al., 2018; Li et al., 2016; Miotto & Youn, 2020). This research demon-
strates the effect of ethics on legitimacy and that the impact of legitimacy on purchase
intention is not immediate since legitimacy has a long-term impact on customer per-
ception. The design of consistent and effective communication strategies is vital for
companies that wants to be legitimated and improve their customer likability.
Information sharing and accountability, for example, are key factors for achieving
legitimacy and, in the long-term, improve brand performance (Miotto, del-Castillo,
et al., 2020).
According to the literature review, previous research proved that CPE affects posi-
tively or negatively the brand perception according to the grade of perceived corporate
ethical behavior (Brunk, 2012), it affects the approach to CSR-related aspects (Brunk
& de Boer, 2020), the customer-brand performance such as purchase intentions and
loyalty (Bianchi et al., 2019; Mena et al., 2019; Szmigin et al., 2007), the customer
satisfaction and market value (Luo & Bhattacharya, 2006) and it defines increasing
consumer habits based on ethical consumer-brand attributes and attitudes (Andersch
et al., 2019; Carrington et al., 2016; Fuentes & Sörum, 2019; Govind et al., 2017;
Yoganathan et al., 2019).
From the consumer decision-making process approach, this research helps better
understand how brands ethicality improves consumers purchase intention and, there-
fore, became a sustained competitive advantage in a crisis situation where customers
are immersed in a uncertain environment. According to the research results, since ethi-
cal behaviors are key for gaining corporate legitimacy and, therefore, for improving
business performances, it is necessary to define communication strategies focused on
messages that prove the high grade of brand ethicality, since ethical attributes are dif-
ficult to perceive (Schamp et al., 2019).
Managers should take into consideration the importance of communicating effec-
tively and emotionally the positive moral attributes of a brands in order to be consid-
ered by the consumers in the screening phase of the purchase journey (Schamp et al.,
2019). Accountability, information sharing, and good corporate governance and busi-
ness ethics practices are key factors for ethical brands perception. CSR and environ-
mental sustainability reports are effective tools for communicating the brands positive
impact (López-Balboa et al., 2021). Brand managers should adopt transparent and
accountable reporting practices that will support and act as a reason to believe of the
brands communication strategies and messages.
The novelty of this project states on the recent disruptive changes that COVID-19
crisis created, such as the great downsize in the household spending (Baker et al.,
2020) and the need of helping firms understand that a positive reaction based on ethi-
cal behavior will contribute to increase customers’ and stakeholders’ support and that
only legitimate companies will survive to this crisis. Thinking about the future of
branding in the new normality, managers should be aware that taking decisions, not
just for the firms’ short-term economic profitability but also for the society common
good, will improve brand legitimacy and consumer purchase intention.
18 American Behavioral Scientist 00(0)
Limitations and Further Research
Regarding the limitations and future research lines of our study, we would like to point
out that this article gathered the data on a very critical moment where citizens were
highly affected by the sanitary crisis and the lockdown, therefore their responses might
have been affected by their specific emotional state. A future investigation, through a
second survey after few months from the lockdown, could help understand the real
social impact that the COVID-19 crisis has caused in the medium and long term in the
consumer habits and brands perception.
A follow-up research would contribute to the theory of planned behavior, analyzing
if the COVID-19 crisis caused a real social change or just a short-term modification in
brands perception. If confirmed, this social change would affect the corporate’s con-
text and organizational practices such as marketing strategy, human resources man-
agement, and corporate governance.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship,
and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship,
and/or publication of this article: This article has been funding by Camilo Prado Foundation and
Blanquerna School of Communication and International Relations.
ORCID iDs
Alicia Blanco-González https://orcid.org/0000-0002-8509-7993
Giorgia Miotto https://orcid.org/0000-0002-0973-6597
Cristina del-Castillo https://orcid.org/0000-0002-7903-1365
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