The corporate philanthropy and legitimacy strategy of tourism firms: a community perspective

Abstract

Corporate philanthropy (CP) is receiving increased attention, especially in transitional countries, such as China. Focusing on Chinese tourism attraction companies that operate on public tourism resources and have close relationships with their surrounding communities, this study investigates the factors driving firms’ CP behaviour from a community perspective. Hypotheses are developed under the legitimacy framework. Probit and tobit regression models are used with data gathered from listed tourism attraction companies in China between 2000 and 2015. Three main findings are obtained. First, tourism attraction companies engage in CP more actively than other companies in the tourism industry. Second, three community-related features are significant drivers of tourism attraction firms’ CP: unbalanced economic development, fierce business competition within the community and scarce educational resources. Third, the economic contribution of tourism partially moderates the associations between community features and tourism attraction firms’ CP. Further interviews with top managers of selected companies confirm the findings of the above statistical analysis. Both the theoretical and practical implications of the findings are discussed at the end of the paper.