When Heritage Doesn't Moderate: The Role of Perceived Ethicality and Recognition Benefits in Building Brand Equity
Keywords:
Recognition Benefits, Customer Perceived Ethicality, Brand Image, Brand Equity, Brand Heritage, State-Owned Heritage BankAbstract
Purpose: This study examines how Customer Perceived Ethicality contributes to Brand Equity in a state-owned heritage bank in Indonesia, with Brand Image and Recognition Benefits as perceptual and relational mechanisms and Brand Heritage as a moderator. Drawing on the Stimulus–Organism–Response perspective and corporate-services-brand literature, the study investigates whether historical identity changes the strength of ethicality effects on downstream brand outcomes.
Methodology: A quantitative, predictive, cross-sectional survey was conducted using purposive sampling among 350 customers with direct experience of the focal bank. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The measurement model was assessed through outer loadings, reliability, Average Variance Extracted (AVE), discriminant validity, and full-collinearity diagnostics. The structural model was evaluated using R², f², bootstrapped direct and indirect effects, and interaction terms.
Findings: Customer Perceived Ethicality positively affects Brand Image (β = 0.345, p < 0.001), Recognition Benefits (β = 0.264, p < 0.001), and Brand Equity (β = 0.143, p = 0.036). Recognition Benefits positively affects Brand Image (β = 0.206, p < 0.001) and Brand Equity (β = 0.192, p = 0.001), while Brand Image has the strongest direct effect on Brand Equity (β = 0.361, p < 0.001). Significant mediation occurs through Brand Image, Recognition Benefits, and the serial pathway Recognition Benefits → Brand Image. None of the three Brand Heritage moderation effects is statistically significant.
Implications: Heritage should not automatically be treated as a boundary condition of ethicality effects. Instead, Brand Heritage can create value directly through Brand Image and Recognition Benefits, while contemporary ethical performance remains independently important for Brand Equity.
Limitations: The study is limited by its single-bank context, cross-sectional design, purposive sampling, and self-reported perceptions. Future research should examine other banking and service contexts, use longitudinal or multi-group designs, and test additional mechanisms explaining when heritage becomes a meaningful boundary condition.
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Copyright (c) 2026 Eggar Sajid Nur Ar-raffi, S.M., Prof. Dr. Budhi Haryanto, M.M., Muhammad Yudha Prawira Negara, S.M., M.M. (Author)
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