Understanding the hospitality philanthropy-performance link: Demand and productivity effects

According to value enhancement theory, corporate philanthropy could have a beneficial impact on hospitality firm performance through the demand and productivity effects. This study makes two significant contributions to the hospitality philanthropy-performance literature in two ways. First, the paper proposes a theoretical model of the hospitality philanthropy-performance relationship based on the productivity effect, not the demand effect. The theoretical innovation in this study can inspire future research and enhance the theoretical development in the literature. The second contribution is that the study performs an empirical analysis to test whether the positive link between hospitality philanthropy and performance is through the demand effect and/or the productivity effect. The results of both panel regression and causality tests using data of Taiwan's hospitality firms show that the productivity effect alone explains the positive link between hospitality philanthropy and performance.