Understanding the hospitality philanthropy-performance link: Demand and productivity effects

Current status and future perspective of the link of corporate social responsibility–corporate financial performance in the tourism and hospitality industry

“…Singal (2014b) confirmed that the relationship between CSR and CFP could be bi-directional, supporting both the instrumental stakeholder theory (i.e., CSR has a positive impact on CFP) and the slack resource theory (CFP has a positive impact on CSR). Besides these, several research studies confirmed the positive relationship between the two based on the value enhancement theory (Chen and Lin, 2015;Chen, 2019b;Wang et al, 2019), a particular form of the stakeholder theory, suggesting corporate philanthropy creates value for shareholders because a company's external image could improve due to such investment in moral issues which can positively impact CFP (Navarro, 1988;Roberts, 1992).…”

“…They identified TH firms with industry specification codes such as the North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC) in the U.S. and China Securities Regulatory Commission (CSRC) in China. While a majority of the aforementioned studies found a positive association between CSR and CFP (Chen, 2019b; Feng et al, 2014; Kim et al, 2017; Nguyen et al, 2019; Singal, 2014a; Theodoulidis et al, 2017; Torres and Augusto, 2021; Wang et al, 2019), some studies also found no direct effect (Wang et al, 2019) and even suggested a curvilinearity of the CSR–CFP link (Chen and Lin, 2015; Franco et al, 2020), suggesting that CSR enhances CFP only up to its optimal point, and CFP decreases as CSR increases further beyond the optimal point. In addition, Singal (2014b), whose primary purpose was to examine the role of family ownership (family vs. nonfamily firms) in relation to CSR and financial conditions (measured by crediting rating), found that lagged CSR positively influenced a firm’s financial conditions measured by credit rating.…”

“…Some studies have examined the CSR–CFP link within the context of collective TH firms across multiple industry sectors (e.g., hotels, restaurants, casinos, OTAs, car-rental agencies, resorts, and cruises) (Chen and Lin, 2015; Chen, 2019b; Feng et al, 2014; Nguyen et al, 2019; Singal, 2014a, 2014b; Theodoulidis et al, 2017; Franco et al, 2020; Torres and Augusto, 2021; Wang et al, 2019; Yeon et al, 2021c). They identified TH firms with industry specification codes such as the North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC) in the U.S. and China Securities Regulatory Commission (CSRC) in China.…”

“…Within the TH context, researchers found a positive, negative, curvilinear, or insignificant effect of CSR on CFP. A majority of the studies examining the relationship between CSR and CFP in the TH literature have found a positive effect of CSR (Assaf et al, 2012, 2017; Benavides-Velasco et al, 2014; Chen, 2019b; Choi and Lee, 2018; Garay and Font, 2012; Jackson and Hua, 2009; Jang et al, 2017; Rodríguez and Cruz, 2007; Lee & Park, 2009, 2010; Kang et al, 2010; Kim and Kim, 2014; Kim and Pennington-Gray, 2017; Lee et al, 2013a; Nguyen et al, 2019; Nicolau, 2008; Ozdemir et al, 2020; Singh et al, 2014; Singjai et al, 2018; Theodoulidis et al, 2017; Yeon et al, 2021a; Zhang et al, 2014). These studies have concluded that socially responsible firms get a range of benefits as compensation for additional investment costs.…”

“…To overcome this shortcoming, some researchers employed a panel data analysis. A number of studies implemented a fixed-effects panel specification in an attempt to overcome estimation associated with endogeneity (Chen, 2019b;Chen and Lin, 2015;Choi and Lee, 2018;Feng et al, 2014;Kim et al, 2018;2020;Lee et al, 2013b;Paek et al, 2013;Park et al, 2017;Park et al, 2019;Ozdemir et al, 2020;Rhou et al, 2016;Wang et al, 2019;Youn et al, 2016;Yeon et al, 2021aYeon et al, , 2021c. Studies used either a fixedor random-effects model based on the results of Hausman's (1978) 2016) employed a panel data consisting of 309 firm observations of 52 U.S. restaurant firms for the period of 1991 to 2011 and conducted an empirical analysis using a one-way fixed-effects model (by year) to take into account the effect of restaurant type.…”