A theoretical link between corporate giving and hospitality firm performance

• Published in: International journal of hospitality management Vol. 66; pp. 130 - 134
• Main Authors: Chen, Ming-Hsiang, Lin, Chien-Pang, Tian, Li, Yang, Yi
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.09.2017
• Subjects: Corporate giving; Duopolistic competition model; Hospitality firm performance; Corporate giving; Hospitality firm performance; Duopolistic competition model
• ISSN: 0278-4319; 1873-4693
• DOI: 10.1016/j.ijhm.2017.05.003

•This study provides a theoretical model of the link between corporate giving (CG) and hospitality firm performance (HFP).•The proposed model is a duopolistic competition model with rational profit-maximizing hospitality firms.•The equilibrium outcomes of the model explicitly explains the mixed findings of the relationship between CG and HFP. This study makes a unique contribution to the hospitality literature by offering a theoretical model of the link between corporate giving (CG) and hospitality firm performance based on a duopolistic competition model with rational profit-maximizing hospitality firms. The equilibrium outcomes of the proposed model explicitly explain the mixed findings of the relationship between CG and hospitality firm performance found in the previous empirical studies. Specifically, the optimal level of a hospitality firm’s CG is positively related to the total market demand and the competitive advantage of CG, and negatively related to the induced cost of giving practices. Moreover, a positive or neutral relationship between CG and hospitality firm performance depends on whether CG could induce a competitive advantage of brand differentiation and customer loyalty to increase profit.