Does the restaurant type matter for investment in corporate social responsibility?

This study investigates the impact of CSR on firms’ performances within the restaurant industry context in the U.S. Contrary to findings from previous studies, this study finds positive main effects of overall CSR and positive CSR (PCSR) on restaurant firms’ value as measured by Tobin's q. This study also argues that restaurant type moderates the effect of CSR on firms’ value and the analysis supports the argument. The positive effects of CSR and PCSR initiatives are greater for fast-food restaurants than full-service restaurants. The study provides empirical evidence that values of companies in the fast-food sector are more susceptible to CSR activities and this result is probably due to the increasing health and obesity concerns prevalent in the U.S. restaurants. The study also confirms these findings with a sensitivity analysis accounting for a potential endogeneity problem.