Do socially responsible activities help hotels and casinos achieve their financial goals?

Seoki Lee, Sun Young Park

Research output: Contribution to journalArticle

171 Citations (Scopus)

Abstract

While the concept of corporate social responsibility (CSR) has gained much attention and is currently practiced by many companies, it has yet to be empirically examined in the context of hotels and casinos, especially in regard to the potential effects of CSR on firm value and performance. As the findings on the relationship between CSR and financial performance have been inconclusive and this relationship has been found to differ among industries, this study examines the relationship between CSR and firm value and profitability for hotels and casinos. Results of the Durbin-Wu-Hausman (DWH) test and a subsequent two-stage least square (2SLS) method show that hotel companies' CSR has a simultaneous and positive relationship with financial performance. For casino companies, however, results show that CSR has no simultaneous or particular effect on financial performance. Findings suggest that hotel companies can confidently and strategically increase CSR investment to enhance both short-term (profitability) and long-term performance (firm value). Casino companies need to carefully examine the effects of CSR on financial performance, when making CSR-related decisions.

Original languageEnglish (US)
Pages (from-to)105-112
Number of pages8
JournalInternational Journal of Hospitality Management
Volume28
Issue number1
DOIs
StatePublished - Mar 1 2009

Fingerprint

profitability
corporate social responsibility
Corporate Social Responsibility
Hotels
Casino
least squares method
Financial performance
industry
effect
firm
Firm value
test
decision
Long-term performance
Two-stage least squares
Industry studies
Firm performance
Profitability
Firm profitability
Hausman test

All Science Journal Classification (ASJC) codes

  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

Cite this

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Do socially responsible activities help hotels and casinos achieve their financial goals? / Lee, Seoki; Park, Sun Young.

In: International Journal of Hospitality Management, Vol. 28, No. 1, 01.03.2009, p. 105-112.

Research output: Contribution to journalArticle

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