Industry-specific effect of CSR initiatives: hotels and airlines

Purpose – This study aims to examine the relationships between a firm's corporate social responsibility (CSR) activities and its performance and risk. The authors hypothesize that industry-level effects are highly determinant of the sign and magnitude of these relationships to establish a ranking of industries to identify the position of the most prominent tourism-related industries: hotels and airlines. Based on the cybernetic model of decision making and the heuristics thereof, shareholders base their investment decisions derived from CSR announcements on the idea that the industries behave differently; their fixed costs being a relevant factor. Design/methodology/approach – The authors estimate the industry-specific effects of CSR initiatives on firms' performance and risk using a sample of 583 announcements from the Spanish Stock Market. Findings – The results show that while CSR announcements have a positive effect on performance when the authors do not account for industry-specific factors, once the...

[1]  Lee D. Parker,et al.  The impact of corporate characteristics on social responsibility disclosure: A typology and frequency-based analysis , 1987 .

[2]  Kamalesh Kumar,et al.  Examining the Link between Strategic Corporate Social Responsibility and Company Performance: An Analysis of the Best Corporate Citizens , 2013 .

[3]  Jerold B. Warner,et al.  MEASURING SECURITY PRICE PERFORMANCE , 1980 .

[4]  J. Nicolau.  CORPORATE SOCIAL RESPONSIBILITY Worth-Creating Activities , 2015 .

[5]  Abagail McWilliams,et al.  Corporate Social Responsibility: a Theory of the Firm Perspective , 2001 .

[6]  V. Kumar,et al.  A contingency framework for the mode of entry decision , 1997 .

[7]  Abagail McWilliams,et al.  Event Studies In Management Research: Theoretical And Empirical Issues , 1997 .

[8]  Stephen. Pavelin,et al.  Corporate Reputation and Social Performance: The Importance of Fit , 2006 .

[9]  J. Steinbruner.  The Cybernetic Theory of Decision , 1976 .

[10]  Ida E. Berger,et al.  Increasing Environmental Sensitivity via Workplace Experiences , 1995 .

[11]  Clyde Eiríkur Hull,et al.  Firm performance: the interactions of corporate social performance with innovation and industry differentiation , 2008 .

[12]  M. Porter,et al.  HOW MUCH DOES INDUSTRY MATTER , REALLY ? , 1997 .

[13]  T. C. Melewar,et al.  Defining the Corporate Identity Construct , 2002 .

[14]  J. Nicolau.  Corporate Social Responsibility: Worth-Creating ctivities , 2008 .

[15]  Abagail McWilliams,et al.  Corporate Social Responsibility: Strategic Implications , 2006 .

[16]  P. Sheldon,et al.  Corporate Social Responsibility in the U.S. Travel Industry , 2008 .

[17]  Geoff Moore,et al.  Corporate Social and Financial Performance: An Investigation in the U.K. Supermarket Industry , 2001 .

[18]  Seoki Lee,et al.  Financial Rewards for Social Responsibility , 2009 .

[19]  B. Menguc,et al.  Corporate reputation, stakeholders and the social performance-financial performance relationship , 2005 .

[20]  Francesco Reggiani,et al.  What Corporate Social Responsibility Activities are Valued by the Market? , 2007 .

[21]  Álvaro Garrido-Morgado,et al.  Corporate Reputation: A Combination of Social Responsibility and Industry , 2012 .

[22]  N. Dawar,et al.  Corporate social responsibility and consumers' attributions and brand evaluations in a product–harm crisis , 2004 .

[23]  M. Porter,et al.  Strategy and society: the link between competitive advantage and corporate social responsibility. , 2006, Harvard business review.

[24]  Elizabeth H. Creyer,et al.  The influence of firm behavior on purchase intention: do consumers really care about business ethics? , 1997 .

[25]  C. Bhattacharya,et al.  Doing Better at Doing Good: When, Why, and How Consumers Respond to Corporate Social Initiatives , 2004 .

[26]  George Balabanis,et al.  Corporate social responsibility and economic performance in the top British companies: are they linked? , 1998 .

[27]  C. Bhattacharya,et al.  Reaping Relational Rewards from Corporate Social Responsibility: The Role of Competitive Positioning , 2007 .

[28]  I Mijoč,et al.  Analysis of financial statements , 2010 .

[29]  H. Simon,et al.  A Behavioral Model of Rational Choice , 1955 .

[30]  J. Nicolau,et al.  The quality of quality awards: Diminishing information asymmetries in a hotel chain , 2010 .

[31]  Emili Vizuete Luciano,et al.  Forgotten effects of corporate social and environmental responsibility: A case study of Catalonian economy , 2013, Kybernetes.

[32]  J. Peloza.  The Challenge of Measuring Financial Impacts From Investments in Corporate Social Performance , 2009 .

[33]  M. Lee.  A Review of the Theories of Corporate Social Responsibility: Its Evolutionary Path and the Road Ahead , 2008 .

[34]  T. Kohers,et al.  The Link Between Corporate Social and Financial Performance: Evidence from the Banking Industry , 2002 .

[35]  M. Adams,et al.  An Analysis of Corporate Donations: United Kingdom Evidence , 1998 .

[36]  Alfred A. Marcus,et al.  THE DETERRENT TO DUBIOUS CORPORATE BEHAVIOR : PROFITABILITY, PROBABILITY, AND SAFETY RECALLS , 1989 .

[37]  J. Mahon,et al.  The Corporate Social Performance and Corporate Financial Performance Debate , 1997 .

[38]  Jordi Surroca,et al.  Corporate Ethical Identity as a Determinant of Firm Performance: A Test of the Mediating Role of Stakeholder Satisfaction , 2007 .

[39]  Juan Luis Nicolau,et al.  The stock market's reaction to quality certification: Empirical evidence from Spain , 2002, Eur. J. Oper. Res..

[40]  Anthony D. Miyazaki,et al.  The influence of cause-related marketing on consumer choice: Does one good turn deserve another? , 2000 .

[41]  Abagail McWilliams,et al.  Corporate social responsibility and financial performance: correlation or misspecification? , 2000 .

[42]  Marc Vilanova,et al.  Exploring the Nature of the Relationship Between CSR and Competitiveness , 2008 .

[43]  Ekkehart Boehmer,et al.  Event-study methodology under conditions of event-induced variance , 1991 .

[44]  Geoffrey B. Sprinkle,et al.  The benefits and costs of corporate social responsibility , 2010 .

[45]  Xueming Luo,et al.  Corporate Social Responsibility, Customer Satisfaction, and Market Value , 2006 .

[46]  T. Woodward,et al.  CSR reporting and the UK financial services sector , 2009 .

[47]  Lynette M. McDonald,et al.  Impact of corporate social responsibility initiatives on Taiwanese banking customers , 2011 .

[48]  Borut Milfelner,et al.  Innovative organisation approach to sustainable tourism development in rural areas , 2006 .

[49]  Paul C. Godfrey,et al.  Toward a General Theory of CSRs , 2010 .

[50]  Simona Sarotar Zizek,et al.  Social responsibility: a way of requisite holism of humans and their well-being , 2013, Kybernetes.

[51]  Julie Whitfield,et al.  Measuring and Examining the Relevance of Discretionary Corporate Social Responsibility in Tourism , 2012 .

[52]  Marcellus Jones.  The Institutional Determinants of Social Responsibility , 1999 .

[53]  C. Bhattacharya,et al.  The role of corporate social responsibility in strengthening multiple stakeholder relationships: A field experiment , 2006 .