IDEAS home Printed from https://ideas.repec.org/a/sae/toueco/v25y2019i6p835-855.html
   My bibliography  Save this article

Philanthropic giving, sales growth, and tourism firm performance: An empirical test of a theoretical assumption

Author

Listed:
  • Keling Wang

    (Yunnan University, China)

  • Yaqiong Miao

    (Yunnan University, China)

  • Ming-Hsiang Chen

    (Nanjing Xiaozhuang University, China; Washington State University, USA)

  • Dengfeng Hu

    (Anhui University of Finance and Economics, China)

Abstract

Aiming to test a theoretical assumption that corporate giving (CG) could increase sales of tourism firms and hence firm performance, this study empirically investigates whether CG could increase sales growth and enhance firm performance in the Chinese tourism industry. Empirical results can enhance theoretical innovation and development. Panel regression test results reveal three interesting findings and support the theoretical assumption. First, there is a variation in the impact of CG on tourism firm performance. While CG does not significantly affect Chinese travel firm performance, it has a significant effect on hotel firm performance in terms of sales growth, return on asset, and return on equity. Second, state ownership is not a critical factor in the financial impact of CG on travel and hotel firms. Third, the Chinese hotel industry might use CG a short-term image builder and sales and profitability generator rather than as a long-term competitiveness strategy. Lastly, there is an inverted U-shaped relationship between CG and hotel firm performance.

Suggested Citation

  • Keling Wang & Yaqiong Miao & Ming-Hsiang Chen & Dengfeng Hu, 2019. "Philanthropic giving, sales growth, and tourism firm performance: An empirical test of a theoretical assumption," Tourism Economics, , vol. 25(6), pages 835-855, September.
    • Handle: RePEc:sae:toueco:v:25:y:2019:i:6:p:835-855
    DOI: 10.1177/1354816618809260
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1354816618809260
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1354816618809260?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gao, Fox & Faff, Robert & Navissi, Farshid, 2012. "Corporate philanthropy: Insights from the 2008 Wenchuan Earthquake in China," Pacific-Basin Finance Journal, Elsevier, vol. 20(3), pages 363-377.
    2. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
    3. Sihai Li & Xianzhong Song & Huiying Wu, 2015. "Political Connection, Ownership Structure, and Corporate Philanthropy in China: A Strategic-Political Perspective," Journal of Business Ethics, Springer, vol. 129(2), pages 399-411, June.
    4. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    5. Chen, Ming-Hsiang, 2010. "The economy, tourism growth and corporate performance in the Taiwanese hotel industry," Tourism Management, Elsevier, vol. 31(5), pages 665-675.
    6. Min Zhang & Lu Xie & Haoran Xu, 2016. "Corporate Philanthropy and Stock Price Crash Risk: Evidence from China," Journal of Business Ethics, Springer, vol. 139(3), pages 595-617, December.
    7. Heli Wang & Jaepil Choi & Jiatao Li, 2008. "Too Little or Too Much? Untangling the Relationship Between Corporate Philanthropy and Firm Financial Performance," Organization Science, INFORMS, vol. 19(1), pages 143-159, February.
    8. Brown, William O. & Helland, Eric & Smith, Janet Kiholm, 2006. "Corporate philanthropic practices," Journal of Corporate Finance, Elsevier, vol. 12(5), pages 855-877, December.
    9. Lin, Karen Jingrong & Tan, Jinsong & Zhao, Liming & Karim, Khondkar, 2015. "In the name of charity: Political connections and strategic corporate social responsibility in a transition economy," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 327-346.
    10. Long, Cheryl & Yang, Jin, 2016. "What explains Chinese private entrepreneurs' charitable behaviors?—A story of dynamic reciprocal relationship between firms and the government," China Economic Review, Elsevier, vol. 40(C), pages 1-16.
    11. Keling Wang & Chien-Pang Lin & Ming-Hsiang Chen & Evelina Gillard, 2018. "The impact of tourism firm’s philanthropy decision on its business objective," Tourism Economics, , vol. 24(5), pages 503-509, August.
    12. Stephen Brammer & Andrew Millington, 2008. "Does it pay to be different? An analysis of the relationship between corporate social and financial performance," Strategic Management Journal, Wiley Blackwell, vol. 29(12), pages 1325-1343, December.
    13. Baruch Lev & Christine Petrovits & Suresh Radhakrishnan, 2010. "Is doing good good for you? how corporate charitable contributions enhance revenue growth," Strategic Management Journal, Wiley Blackwell, vol. 31(2), pages 182-200, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yang Zhang & Su Zhang & Fu-Chieh Hsu, 2023. "Crisis Management Performance of Upscale Hotels in the Greater Bay Area, China: A Comparative Study in a Complex Institutional Situation," Sustainability, MDPI, vol. 15(6), pages 1-24, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Keling Wang & Yaqiong Miao & Ching-Hui (Joan) Su & Ming-Hsiang Chen & Zhongjun Wu & Tie Wang, 2019. "Does Corporate Charitable Giving Help Sustain Corporate Performance in China?," Sustainability, MDPI, vol. 11(5), pages 1-17, March.
    2. Tan, Siow-Hooi & Habibullah, Muzafar & Ong, Hway-Boon & Mohamed, Azali, 2019. "Moderating Effect of Slack Resources on the Charitable Giving and Firm Performance Nexus," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(3), pages 129-139.
    3. Liu, Yaosong & Zhang, Min & Ye, Tingting & Zhang, Yue, 2019. "Does giving always lead to getting? Evidence from the collapse of charity credibility in China," Pacific-Basin Finance Journal, Elsevier, vol. 58(C).
    4. Ateeq ur Rehman Irshad & Nabeel Safdar & Wajiha Manzoor, 2023. "Predicting Efficiency of Innovative Disaster Response Practices: Case Study of China’s Corporate Philanthropy," Sustainability, MDPI, vol. 15(3), pages 1-15, January.
    5. Frederik Plewnia & Edeltraud Guenther, 2017. "The benefits of doing good: a meta-analysis of corporate philanthropy business outcomes and its implications for management control," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(3), pages 347-376, October.
    6. Jun Xie & Junyi Chen, 2021. "Corporate philanthropy, public awareness, and the cost of equity capital: Evidence from China," Annals of Economics and Finance, Society for AEF, vol. 22(1), pages 153-194, May.
    7. Shuxia Zhang & Deyue Kong & Liping Xu & Ruiyu Xu, 2023. "Dual effects of corporate philanthropy on firm value: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2314-2327, June.
    8. Jun Chen & Wang Dong & Jamie Tong & Feida Zhang, 2018. "Corporate Philanthropy and Tunneling: Evidence from China," Journal of Business Ethics, Springer, vol. 150(1), pages 135-157, June.
    9. Shuhan Chen & Lerong He & Guangqing Yang, 2024. "Corporate contribution to poverty alleviation: an integrated framework of willingness and ability," Asian Business & Management, Palgrave Macmillan, vol. 23(4), pages 570-596, September.
    10. Shuxia Zhang & Liping Xu & Ning Liu, 2022. "Crowding‐in and crowding‐out effects of corporate philanthropy on R&D investment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1835-1849, September.
    11. Hanwen Chen & Siyi Liu & Xin Liu & Daoguang Yang, 2022. "Adversity Tries Friends: A Multilevel Analysis of Corporate Philanthropic Response to the Local Spread of COVID-19 in China," Journal of Business Ethics, Springer, vol. 177(3), pages 585-612, May.
    12. Keling Wang & Chien-Pang Lin & Ming-Hsiang Chen & Evelina Gillard, 2018. "The impact of tourism firm’s philanthropy decision on its business objective," Tourism Economics, , vol. 24(5), pages 503-509, August.
    13. Uzma Bashir, 2017. "Determinants of Corporate Philanthropy: A Case of Karachi Stock Exchange," International Econometric Review (IER), Econometric Research Association, vol. 9(1), pages 19-36, April.
    14. Yongqiang Gao & Haibin Yang & Taïeb Hafsi, 2019. "Corporate giving and corporate financial performance: the S-curve relationship," Asia Pacific Journal of Management, Springer, vol. 36(3), pages 687-713, September.
    15. Heli Wang & Ming Jia & Zhe Zhang, 2021. "Good Deeds Done in Silence: Stakeholder Management and Quiet Giving by Chinese Firms," Organization Science, INFORMS, vol. 32(3), pages 649-674, May.
    16. Chen, Jun & Dong, Wang & Tong, Jamie Yixing & Zhang, Feida Frank, 2018. "Corporate philanthropy and investment efficiency: Empirical evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 51(C), pages 392-409.
    17. Kiyoung Chang & Hoje Jo & Ying Li, 2018. "Is there Informational Value in Corporate Giving?," Journal of Business Ethics, Springer, vol. 151(2), pages 473-496, August.
    18. Chuyuan Liu & Jing Tang & Chenghao Huang, 2024. "Corporate philanthropy, political connections, and costs of equity capital," Kyklos, Wiley Blackwell, vol. 77(3), pages 546-573, August.
    19. Chen, Donghua & Jiang, Dequan & Yu, Xin, 2015. "Corporate philanthropy and bank loans in China," Pacific-Basin Finance Journal, Elsevier, vol. 35(PA), pages 402-424.
    20. Lei Xu & Xiaoning Guo & Yan Liu & Xiaochen Sun & Jie Ji, 2022. "How Does Corporate Charitable Giving Affect Enterprise Innovation? A Literature Review and Research Directions," Sustainability, MDPI, vol. 14(23), pages 1-21, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:toueco:v:25:y:2019:i:6:p:835-855. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.