Corporate social responsibility and organisational performance in the tourism sector

This study tests the bidirectional connections between corporate social responsibility performance and the financial performance of firms within the tourism sector and related industries based on the instrumental stakeholder and slack resources theories. Disaggregated measures of firms' corporate social responsibility practices and corporate financial performance were considered to avoid compensation effects. This choice also allows for testing of whether separated dimensions of corporate social responsibility have different linkages with corporate financial performance measures. Static and dynamic panel data regression models were implemented for robustness. With a few exceptions, the study found a neutral impact of corporate environmental, social, and governance performance on firms' financial success. This study therefore recommends that managers of tourism firms should engage in corporate social responsibility practices, which can contribute to different sustainable development goals without sacrificing financial performance. Contradictory to the slack resources theory, with a few exceptions, the higher the financial performance of tourism firms, the lower their commitment to corporate social responsibility issues. Furthermore, tourism firms must communicate their corporate social responsibility initiatives to develop public awareness of their environmental, social, and governance efforts.