This paper aims to enhance the current body of literature on managing the COVID-19 crisis within the hospitality sector by examining the market’s response to corporate social responsibility (CSR) decoupling strategies.
By applying an event study approach, this research investigates a data set of 53 socially responsible US companies within the hospitality sector.
The findings based on regression analysis indicate that the market responded positively to hospitality companies implementing CSR decoupling strategies during the initial seven days following the World Health Organization’s declaration of COVID-19 as a pandemic. However, a shift to negative abnormal returns is observed twenty days after this event date. Through an analysis of the impacts of three key categories of CSR decoupling activities – consumers, employees and community – the results show that the market reaction to CSR decoupling strategies is largely attributed to initiatives targeting consumers and employees. Employee-focused activities have a more significant effect on market returns, followed by consumer-focused activities. Conversely, the market reaction to community-focused initiatives is weak and almost statistically insignificant.
To the best of the authors’ knowledge, this study is the first to empirically examine CSR decoupling strategies in the hospitality sector during the COVID-19 crisis. The research makes a new contribution by analyzing the differential market reactions to three key categories of CSR decoupling activities – consumer-, employee- and community-focused initiatives. This provides unique theoretical insights into how institutional complexity and stakeholder salience evolve during extreme crisis conditions, extending existing theoretical frameworks on crisis management in the hospitality industry.
