Does size matter? Corporate social responsibility and firm performance in the restaurant industry

Despite an increasing number of hospitality studies on the link between corporate social responsibility (CSR) and corporate financial performance (CFP), the literature has predominantly focused on the CSR–CFP relation without considering moderating factors. Consequently, the current study introduces firm size as a potential moderator on the CSR–CFP relationship. Performing a two-way fixed-effects model by firm and year with Newey-West standard errors, this study finds that firm size moderates the effect of positive CSR on CFP while it does not moderate the effect of negative CSR on CFP in the U.S. restaurant context.     

Are better-connected CEOs more socially responsible? Evidence from the U.S. restaurant industry

Extensive research has documented how corporate social responsibility (CSR) outcomes are determined by CEOs' intrinsic characteristics, while their social network status has been under-researched. Building on impression management theory and resource-based theory, the current study analyzes the association between CSR activities and top management's position in the social hierarchy, i.e., network centrality. The heterogeneous effects across different restaurant and CSR types are examined based on stakeholder theory. Using a panel dataset of publicly traded U.S. restaurant companies and a novel dataset of CEO network centrality, we find that firms with highly connected CEOs are involved in more socially responsible activities. In addition, the marginal effect of network centrality on CSR is stronger for fast-food than for full-service restaurants and more prominent for external than internal stakeholder subcategories. The results advance the determinant analysis of CSR and provide managerial implications for CEO selection and policy suggestions on CSR promotion.     

Does managerial ownership influence franchising in restaurant companies?

Although the link between managerial ownership and firm performance is often explained in relation to a firm’s risk-taking behavior, little is known about how managerial ownership affects corporate risk-taking in industries characterized by high financial and operational risks, like the restaurant industry. To understand this important and understudied link, our study draws upon agency theory to examine the relationship between managerial ownership and franchising, typically a risk-reduction strategy of restaurant firms. Our results from panel data analyses using a sample of 962 firm-year observations show that managerial ownership is negatively associated with degree of franchising. Further, we find that after considering the scope of managerial discretion, there is a U-shaped relationship between managerial ownership and degree of franchising such that the degree of franchising decreases as managerial ownership increases up to a certain level, but then increases in tandem as managerial ownership increases to higher levels. Our results indicate that there is an optimal level of franchising associated with managerial ownership, implying that owners can influence their firms’ risk-taking behavior by setting target managerial ownership goals and designing effective incentive contracts.     

Does franchising help restaurant firm value?

A company's financial performance is of keen interest to many groups of people, including management, employees, shareholders, government, and so on. Although franchising has been one of the most common strategies to maximize a firm's financial performance in the restaurant industry, little research has been conducted regarding the relationship between the degree of franchising and the restaurant firm's financial performance. This study initially proposed a sigmoid relationship between the degree of franchising and the restaurant firm's financial performance based on the diversification theory. Findings, however, do not fully support the sigmoid relationship; rather a more quadratic or inverted U-shaped relationship was found.     

Does tourism matter in measuring community resilience?

As damage from natural hazards is increasing, quantifying community resilience is a top priority in enhancing communities' ability to prepare for and recover from disasters. This study examines the significance of tourism in measuring community resilience by proposing a tourism community resilience measurement model. To identify key tourism industries that significantly improve community resilience, this study also explores the spatially heterogeneous associations between the validated community resilience metric and tourism industry specialization across 67 counties in Florida. The results indicate that the tourism dimension is important in measuring community resilience and that specific tourism sectors, including amusements and spectator sports, are positively associated with community resilience. These findings can help community policymakers develop localized resilience enhancement strategies by considering tourism.     

Does work engagement mediate the effects of challenge stressors on job outcomes? Evidence from the hotel industry

Drawing on the transactional theory of stress, a research model investigating whether challenge stressors, as manifested by work overload and job responsibility, heighten work engagement and organizationally valued job outcomes is proposed and tested. Using data gathered from frontline employees with a time lag of two weeks and their supervisors in the five-star hotels in Northern Cyprus, the relationships were assessed through structural equation modeling. As hypothesized, work engagement fully mediates the effects of challenge stressors on affective organizational commitment and job performance. Employees who experience such stressors are engaged in their work, and therefore, display positive job outcomes. Theoretical implications as well as management implications are discussed in the article.     

The corporate social responsibility–financial performance link in the U.S. restaurant industry: Do economic conditions matter?

This study examines the role played by economic conditions (recessionary periods) on the link between corporate social responsibility (CSR) and corporate financial performance (CFP) in the U.S. restaurant industry. The choice of industry setting is based on the fact that the restaurant industry is subject to consumer discretionary expenditures and is thus highly sensitive to the state of the economy. This study further examines the relationship between CSR and CFP by dichotomizing CSR activities based on whether they are related to the firm's core operations or not, thus parsing out the effect of operations-related (OR) and non-operations-related (Non-OR) CSR activities, providing a more nuanced explanation of how some CSR activities may be more beneficial than others, to firm value in hard economic times.     

Does cultural value exacerbate or mitigate the effect of perceived compensation gap between locals and expatriates in hotel industry?

Within the expatriation system in the hospitality industry, a large compensation gap exists between expatriates and local employees. Drawing upon equity and social exchange theories, this paper examines the relationship between the perceived reasonableness of the expatriate–local compensation gap and workplace deviance behaviors (organizational and interpersonal). Moreover, the paper discusses the moderating effect of power distance and traditionality as important cultural boundaries in this relationship. Results of a survey among 46 expatriates and 297 local employees in the Chinese hotel industry indicated that the perceived compensation gap is positively related to the organizational and interpersonal deviance of local subordinates. High traditionality mitigates the effect of the compensation gap on deviance. However, contrary to our expectation, high power distance exacerbates such effect. The paper likewise discusses the theoretical and practical implications of the findings.     

Does communicating safety matter?

Tourists generally prefer to visit safe destinations. However, it is rare to see safety messages in promotional materials. Does communicating safety in destination-branding campaigns matter to tourists? We use an experimental design to explore the relationship between safety messages and visit intentions. The results show that the extent to which safety messages increase visit intentions depends on tourists’ risk propensity and self-efficacy in travel planning. The effect of safety messages is greater for low-risk-propensity respondents than for high-risk-propensity respondents; it is also greater for respondents with high (compared to low) self-efficacy in travel planning. We conclude that safety messages help to promote a destination, subject to the moderating influence of cognitive tendencies.     

Does eco certification sell tourism services? Evidence from a quasi-experimental observation study in Iceland

Eco labelling of tourism services has been studied extensively in the past. Yet, there is no agreement on two key points: (1) whether or not eco certification increases tourist demand for a product among the general tourist population, and (2) whether or not there is a specific market segment whose purchase decisions are influenced by eco labels. Lack of agreement is partially due to the wide variety of different research approaches used. Most studies have in common, however, that they rely solely on tourist self reports of either behavioural intentions or past behaviour. The present study re-investigates these two questions using a quasi-experimental design based on actual observed behaviour and objective knowledge testing. Results indicate that (1) eco labelling does not have a big impact on general tourist demand, but (2) a niche market exists which is influenced by eco labelling when choosing among alternative tourist providers. The research design used in the present study offers a useful alternative for investigations of tourist purchase decisions. It leads to more reliable results because it is based on the observation of actual displayed behaviour, thus avoiding a range of answer biases. Other eco-certified products now need research on similar lines.     

Environment management in the hotel industry: does institutional environment matter?

Limited theoretical attention has been paid to understand the underlying drivers of hotels’ engagement in environment management (EM). By using institutional theory, this study provides an integrated model that captures various social drivers of hotels’ engagement in EM. The associations between the three dimensions of institutional environment and hotel environmental practices were empirically tested, as well as the moderating role of hotel characteristics. A total of 414 usable surveys representing 414 hotels were collected from hotel managers in China. The results demonstrate positive associations of hotel EM practices with supportive state regulations, shared industry standards, competitors’ EM practices and expectations from various stakeholders such as employees, local community, and investors. Particularity, the strength of positive relationships between specific institutional pressures vary across hotel sizes and scales. Theoretical and practical implications are discussed     

Do regional factors matter? Determinants of hotel industry performance in China

The hotel industry is deeply embedded in local regional conditions, though the influence of regional factors is seldom investigated. Three key hotel industry metrics, Revenue per Available Room (RevPAR), Average Room Rate (ARR), and rooms rented, were examined for their determinants using ordinary least squares and negative binomial regression models on key endogenous and exogenous (regional) factors, including Destination Attractiveness and Capacity, Business and Commercial Environment, Image and Openness, and Tourism Professional Specialization. Using China as a case study, and at different hotel star designations (2- to 5-star hotels), the results show that RevPAR is determined mainly by labor quality and Tourism Professional Specialization. Particularly, regional factors significantly affect ARR and rooms rented. The influence and sophistication of regional factors increases with higher star designations. This paper highlights links between the hospitality industry and regional economic development, which should be considered by both the hotel industry and tourism policy makers.     

Customers’ risk perception and dine-out motivation during a pandemic: Insight for the restaurant industry

The restaurant industry is one of the most affected businesses during the outbreak of COVID-19. The customer choice regarding whether or not to dine in a restaurant have changed due to this unprecedented global pandemic. Integrated with the affective decision-making framework, meta-theoretic model of motivation (3M), and optimistic bias theory, this conceptual paper proposes a theoretical scheme for understanding constructs that affect consumer motivation while considering the significance of consumers’ risk perceptions of the novel coronavirus disease. This research aims to delineate the role of loyalty, trust, and transparency on resuming in-restaurant dining during and after the pandemic. By identifying the link between each construct and addressing the unparalleled food-/health related risks, this study suggests that restaurants who accumulated more customer trust by fostering transparency are likely to have more business and quickly recover from the shock.     

Does world heritage list really induce more tourists? Evidence from Macau

It is commonly believed that being listed on the World Heritage List (WHL) results in attracting more tourists. However, this assumption has not been generally subject to rigorous econometric approach in the existing literature. To fill this gap, we assess the impact of the accreditation World Heritage status on the “Historic Centre of Macau” in 2005 on visitor numbers to the territory to identify the real effect of WHL on fostering tourism. In doing so, because of the policy restrictions on the mainland Chinese tourists, such tourists have been excluded from the analysis. The empirical results indicate that there is no significant effect of WHL on promoting tourism other than possibly a short-run tourism-enhancing impact. Notably, this effect is particularly relevant to Asian tourists. This paper discusses these results in the wider context of econometric analyses of tourism.     

Does better service induce higher profitability? Evidence from Taiwanese Hospitality Industry

We adopt Wang et al. (2006) service quality measure to examine how the qualities of various hotel services affect hotel's profitability using panel data in the Taiwanese international tourist hotel sector. The empirical results indicate that there is a non-linear relationship between food and beverage service quality and hotel profitability, while the effect of room service quality on hotel profitability is not significant.     

Does getting along matter? Tourist-tourist rapport in guided group activities

Guided group activities, where tourists consume with other tourists, are common and important. Although the tourism and services literature suggests customer-employee rapport impacts customer satisfaction, the composition and impact of tourist-tourist rapport in guided group activities have received minimal attention. We use a three-study mixed method approach to conceptualize and examine tourist-tourist rapport in guided group activities. Study 1 identifies two recognized dyadic dimensions of tourist-tourist rapport (enjoyable interaction and personal connection) and two new group-based dimensions (group attentiveness and service congruity). Study 2 (video experiment) and Study 3 (field experiment) find that enjoyable interaction and personal connection mediate the relationship between group attentiveness and service congruity with satisfaction. Thus, tourist-tourist rapport in a group context is more multidimensional and complex than previously conceptualized for customer-employee rapport and non-group contexts. Further, we find tourist-tourist rapport is a critical service factor such that high levels satisfy, while low levels dissatisfy.     

Drivers and consequences of sustainability committee existence? Evidence from the hospitality and tourism industry

This study's objective is twofold: (1) to investigate whether board characteristics predict the existence of a sustainability committee, and (2) to examine whether the establishment of sustainability committees stimulates sustainability reporting, external assurance, and the adoption of the Global Reporting Initiative (GRI) framework in hospitality and tourism (H&T) firms. For this purpose, the data was derived from the Thomson Reuters Eikon database for publicly traded H&T firms from 2013 to 2018. The results indicate that while board size is a significant predictor of sustainability committee establishment, female and independent directors are not. Furthermore, the H&T firms with a sustainability committee are more likely to issue a sustainability report, to get an independent assurance statement on sustainability reporting, and to follow GRI guidelines in configuring sustainability report content and structure. Overall, the results suggest important implications to help H&T firms achieve sustainable goals and to design their boards accordingly.     

Social responsibility and total quality in the hospitality industry: does gender matter?

This empirical study examines the role of gender diversity in top management teams (TMTs) and their impact on corporate social responsibility (CSR), which is an underexplored topic within the hotel sector. Based on stakeholder theory, we argue that the relationship between gender diversity and hotel performance is indirect and mediated by CSR. Our study also analyses how the implementation of total quality management (TQM) and CSR influences hotel stakeholder results, and hence business performance. Using a sample of Spanish hotels, we provide evidence that gender diversity in TMTs increases the level of implementation of CSR within the hotel industry. The results show that the impact of gender diversity on hotel performance is mediated by CSR. The findings also suggest that the adoption of TQM and CSR management philosophies improves the capacity of hotels to benefit their stakeholders, and that this improvement has a positive effect on hotel performance.     

Determinants of hotels’ environmental performance: Evidence from the hotel industry in Accra,Ghana

This study explores the factors that account for the environmental performance of hotels in the special context of a developing country, Ghana. It also examined the socio-demographic characteristics of managers and organizational characteristics that determine the environmental performance of Ghanaian hotels. A stratified random sampling method was employed to survey 200 hotel managers from different categories of hotels in Accra. Ninety-four per cent were independent, and Ghanaian-owned. Sixty-seven per cent had fewer than 20 rooms; only 45 had more than 100 rooms. Only 11.6% were affiliated to foreign multinational companies in any way. Six key factors that accounted for the environmental performance were extracted from a factor analysis. They included, in order of most practised, the environmental education and training for staff, measures to support for the host community, conservation project support, compliance with environmental regulations, waste management, and voluntary programmes. A hierarchical multiple regression analysis indicated that larger size and better class of hotels, as well as those with membership of the national hotel trade association, had better environmental performance as did hotels with better paid managers. Affiliation to foreign multinational chains did not predict better performance. A series of suggestions are made to improve the environmental performance of Ghana's hotels.     

Does a server's attentiveness matter? Understanding intercultural service encounters in restaurants

Interaction between customers and servers from different cultures provides an interesting case of intercultural communication. Although a server's attentive service on customers is common in full service dining restaurants, especially in the United States, this may not be preferable to customers from different cultures. Two studies examined cultural differences between Americans and Japanese customers on their preferences regarding U.S. restaurant servers’ attentiveness and a moderating effect of culture on the relationship of server attentiveness with customer orientation, customer satisfaction and tip. A survey study (N = 975) and an experimental study (N = 145) found that server attentiveness had a positive effect on customer orientation, customer satisfaction and the amount of tip for Americans, but not Japanese customers. Implications and future directions were discussed.