Effects of corporate social performance on corporate financial performance: A two-sector analysis between the U.S. hospitality and manufacturing companies

Abstract

This study aimed to compare the commonalities and differences of corporate social performance among a sample of U.S. hospitality and manufacturing companies, as well as to examine the impacts of corporate social performance on corporate financial performance in both industries. Using panel data from 1991 to 2013, the study primarily investigated significant differences in the environment, corporate governance, and diversity-related performance among companies in the sample. Among the results, the performance of employee relations and corporate governance was positively associated with short- and long-term financial performance among the hospitality companies. However, the community performance tended to influence the short-term financial performance and employee relations tended to influence the long-term financial performance of the manufacturing companies. The results clarify the complex correlations of corporate social performance and financial performance for hospitality researchers, as well as encourage hospitality practitioners to invest efficiently in improving the corporate social performance and thus corporate financial performance of their firms.