Doing well by doing right: heterogeneous effects of tourism firms’ social responsibility on service productivity and profitability

Abstract

ABSTRACT This paper seeks to explore the heterogeneous effects of corporate social responsibility (CSR) practices on the service productivity and profitability of tourism firms, applying the perspectives of stakeholder theory and the resource-based view. We employ data envelopment analysis to gauge service productivity and to conduct an analysis of inefficiencies and benchmarks for underperforming firms. Additionally, we employ a two-way fixed-effects regression model using unbalanced panel data to discern the heterogeneous effects of CSR practices on firm performance. Our findings indicate that internal CSR practices (involving managers and employees) are positively correlated with both service productivity and profitability. Conversely, external CSR practices (involving suppliers, customers, environmental and societal factors) exhibit a negative impact on profitability but do not significantly affect service productivity. Further analysis reveals that service productivity and profitability are less likely to be the primary drivers of CSR practices, mitigating concerns regarding a potential bidirectional relationship.