Corporate social responsibility in the hospitality and tourism industry: Do family control and financial condition matter?

Family firms have been known to perform better both financially and socially (CSR) than their nonfamily counterparts. However, it is not known whether the better social performance is a consequence of better financial performance. Within the hospitality and tourism industry, we find that family firms are financially stronger, but do not actually invest more in CSR than nonfamily firms once controlled for their financial condition, as measured by credit ratings. Interestingly, we also find that family firms invest more in mitigating concerns than in taking positive initiatives to build strengths in CSR performance. Finally, we find that judicious investment by family firms in CSR positively affects their future financial performance.