The Nexus Between Customer Protection and Firm Performance of Listed Consumer Goods Companies in South Africa

Abstract

Customer protection has become an increasingly central dimension of stakeholder management and sustainable value creation, particularly in emerging markets where regulatory enforcement and information transparency remain inconsistent. This study investigates the relationship between customer protection and firm performance among listed consumer goods companies in South Africa. Specifically, it examines the effects of the Warranty Claims Ratio (WCR) and Revenue Return Ratio (RRR) on firm value, proxied by Tobin’s Q.A correlational research design was employed to examine the relationships among the variables using panel data from 20 Johannesburg Stock Exchange (JSE) listed consumer goods firms over the period 2015-2024. The analysis utilized pooled OLS, fixed effects, and random effects regression models to estimate associations, supported by diagnostic and robustness checks to ensure validity and reliability of the findings. The findings reveal that WCR exerts a positive and significant influence on firm value, suggesting that warranty-related commitments signal product quality and long-term reliability. By contrast, RRR shows no statistically significant association with firm value. The study concludes that strategic disclosure of warranty-related information enhances firm value in the consumer goods sector, as warranties convey enduring quality assurances rather than short-term transactional outcomes. Accordingly, investors are encouraged to prioritize warranty terms over return ratios when evaluating firm reliability and long-term performance. Keywords: Customer protection; corporate value; warranty claims ratio; revenue return ratio; Tobin’s Q