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Considering the increasing significance of environmental, social, and governance (ESG) in the corporate world, an exploration of ESG reporting in the hospitality context has received limited attention. Accordingly, based on the stakeholder and institutional theories, this study proposes to reveal the overall and contemporary status of the restaurant industry's ESG practices and further compare the ESG engagements of full-service restaurants and limited-service restaurants. This study collects data from publicly traded restaurant companies' ESG reports and employs automated content analysis based on a computer-assisted qualitative data analysis approach. The findings of this study provide value to the ESG literature and practical implications [ABSTRACT FROM AUTHOR]

Based on the trade-off theory of capital structure and the information asymmetry theory of business financing, we evaluated the association of informal financing with the financial performance of small- and medium-sized enterprises (SMEs) in the restaurant industry. This study collected survey responses directly from small- and medium-sized restaurant owners (n = 178) during the COVID-19 pandemic. The findings of the study suggested that reliance on "family, friends, relatives, and third-party lenders" for financing was associated with lower financial performance during a crisis for restaurants. Results were robust when controlled for the owner's gender, business affiliation, firm age, and relative firm size. Furthermore, we also found that the relative firm size of SMEs moderated this relationship such that, for mid-sized firms ($2–5 million annual revenues), the negative association with financial performance was lower than that for smaller firms (<$2 million annual revenue) and larger firms (>$5 million annual revenues). This article theoretically contributes to the literature by investigating the influence of informal financing on a firm's performance, and the role of relative firm size within the category of SMEs in this relationship. Findings from the study provide practical guidance for SMEs and informal lenders. [ABSTRACT FROM AUTHOR]

Purpose: Through the lens of the upper echelons theory, this study aims to investigate how generalist chief executive officers (CEOs) affect social novelty. This paper also explores the moderating effect of CEO power on the relationship between generalist CEOs and social novelty. Design/methodology/approach: This study uses generalized estimating equation models and robust standard errors by firm to correct for autoregressive disturbances within clusters in the data. Findings: Restaurant firms with generalist CEOs are likely to feature gender diversity and member change in the top management structure. This positive effect of a generalist CEO on top management team's (TMT) structure is enhanced by the CEO's power over board members. Practical implications: This study presents important evidence that CEOs' characteristics largely influence the gender heterogeneity and dynamic of the TMT, which in turn promote and shape innovative initiatives and actions. Originality/value: To the best of the authors' knowledge, this paper is one of the first to investigate the effect of CEOs' human capital on the way in which the TMT is composed and characterized in the restaurant sector. [ABSTRACT FROM AUTHOR]

Purpose This study aims to examine how geographic diversification affects firms' risk by introducing the franchising strategy as a moderator.Design/methodology/approach The panel regression analysis was conducted with a sample of US restaurant firms. Specifically, a two-way random (or fixed) effects model clustered by firm was used to test hypotheses.Findings Findings show that geographic diversification does not significantly affect restaurant firms' risk. However, franchising aggravates the negative effect of geographic diversification on restaurant firms' risk, which contradicts the traditional theories of franchising.Research limitations/implications The results are expected to contribute to the diversification literature in the hospitality management by providing in-depth evidence for the effects of geographic diversification strategies on firms' risk. Specifically, the study provides relevant theories for explaining the effect of geographic diversification in the restaurant context by examining franchising, a prominent strategy in the restaurant industry.Practical implications The results encourage restaurant firms to improve their managerial capability to react to changes in a geographically wider scope of markets and develop franchising contracts specifically to prevent misbehavior and moral hazard on the part of franchisees.Originality/value Considering the lack of research on the effect of geographic diversification on restaurant firms' risk, this study examines not only the link between geographic diversification and firms' risk but also a contingent factor, franchising. [ABSTRACT FROM AUTHOR]

Considering the sensitivity of the restaurant industry – its volatility to economic changes and its competitive environment – it is imperative for restaurant operators to manage business risk. Based on a risk management perspective, this paper seeks to draw performance implications from firms' strategic disconformity, which can help explain the inherent nature of uncertainty and volatility. The results of the study indicate that restaurant firms' strategic disconformity is positively associated with performance extremeness and performance volatility. Moreover, the relationship between a restaurant firm's strategic disconformity and extremeness and volatility of firm performance is negatively moderated by environmental complexity. The findings of this study enrich the restaurant literature by incorporating this important aspect of the risky nature of strategic disconformity in understanding a firm's performance extremeness and volatility. This study also implies that restaurant operators need to engage in strategic disconformity with care, depending on their current environmental conditions. • Restaurant firms' strategic disconformity leads to a higher level of performance extremeness and volatility. • Environmental complexity weakens the effect of restaurant firms' strategic disconformity on performance extremeness and volatility. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this study is twofold: to investigate the relationship between restaurant firms’ internationalization and systematic risk, and to further examine the relationship between internationalization and systematic risk based on the type of restaurant firm (i.e. limited-service vs full-service restaurants).Design/methodology/approach This study analyzes data from US-based publicly traded restaurant firms by estimating systematic risk based on the Carhart four-factor model and by performing a two-way random-effects model.Findings Findings support not only the risk-reduction effect of internationalization on systematic risk but also the moderating effect of the role of restaurant type on the relationship between internationalization and systematic risk. More specifically, the risk-reduction effect of internationalization on systematic risk is greater for limited-service than full-service restaurants.Practical implications The findings of this study can provide restaurant executives with more confidence in pursuing internationalization as part of their risk management strategy, acknowledging that more international operations could mitigate restaurant firms’ systematic risk. More specifically, limited-service restaurants can more significantly enjoy the risk-reduction benefits by increasing their international operations than full-service restaurants based on the findings of this study. Furthermore, risk-averse investors could consider purchasing shares of limited-service multinational restaurants’ stocks to enjoy more risk-reduction benefits.Originality/value By focusing on the restaurant industry with consideration for the restaurant type, this study provides more tailored recommendations for implementing internationalization strategies with regard to risk management. [ABSTRACT FROM AUTHOR]

Although some theories argued that investment decisions are irrelevant to financing decisions under the assumption of perfect market, investment decisions and capital structure seem interdependent in real-world circumstances. Further, the past literature also suggested a close relationship between internal cash flows and investment decisions, that is, investment–cash flow sensitivity (ICFS), but this issue has not been closely examined in the restaurant setting. Therefore, the current study first proposes to examine ICFS in the context of the restaurant industry. More importantly, this study also examines a moderating role of franchising to better explain ICFS, considering a major role of franchising in the restaurant industry, based on theories of pecking order, resource scarcity, and risk sharing. Findings of the current study deepens the understanding of ICFS via franchising, making meaningful contributions to not only to existing ICFS literature but also restaurant franchising literature. [ABSTRACT FROM AUTHOR]

Although the implications of adopting a franchising strategy in the restaurant industry have been examined in previous literature, the role of franchising has mostly been viewed as a means of growth, without much attention paid to its role in reducing risk via alleviating earnings volatility. In this study, we examine whether, and to what extent, franchising in restaurant firms can reduce earnings volatility occurring due to fluctuating economic conditions. Our longitudinal analysis of publicly traded restaurant firms from 1994 to 2012 shows that, during changes in economic conditions, firms adopting a high degree of franchising face lower earnings volatility than firms that adopt a restricted degree of franchising. Our article contributes to the literature on restaurant franchising as a risk-management strategy while providing avenues for future research. [ABSTRACT FROM AUTHOR]

Brand equity plays a significant role in the restaurant industry due to the competitive advantage gained by differentiation. It has been identified as a main component of intangible assets that decides the market value of a firm in the industry. Although the importance of brand equity has been well recognized in the restaurant literature, there has been little investigation regarding how to objectively quantify brand equity, especially by using secondary market data. Further, there is no publicly available brand equity data of restaurant firms thus far. For these reasons, this study aims to develop an approach on how to estimate a restaurant's brand equity not only by utilizing the secondary market data but also by incorporating the unique characteristics of restaurant firms. By proposing a restaurant-specific model to estimate brand equity, this study contributes to the restaurant literature and to the industry as a whole. [ABSTRACT FROM AUTHOR]

The purpose of the study is to determine whether vaccination rates and the use of franchising have an impact on the volatility of stock returns in the restaurant industry. Based on the agency and resource scarcity theories, this study first examines the effect of vaccinations against COVID-19 on a restaurant firm's stock return volatilities caused by uncertainty during a crisis. The study further investigates whether firm-specific vaccination rates more greatly reduce stock return volatilities as the degree of franchising increases. With a two-way fixed-effects model, the study finds that the firm-specific vaccination rate reduces volatilities of the firm's stock returns. However, the study also finds an opposite direction to the moderating effect of franchising in that the more a restaurant firm franchises, the further the risk-reduction effect of its vaccination rate diminishes. Theoretical and practical implications along with limitations are discussed. • Firm-specific vaccination rates reduce volatilities of the firm's stock returns. • As a restaurant firm franchises more, the risk-reduction effect of its vaccination rate diminishes. • High vaccination rates across the nation will help businesses reduce risks. [ABSTRACT FROM AUTHOR]

Purpose The purpose of the current study is to investigate the possible existence of a synergistic effect of internationalization and corporate social responsibility (CSR) on a firm’s value performance.Design/methodology/approach To empirically test the argument, this study analyzed data from 40 US-based publicly traded restaurant companies (251 observations) from 2000 to 2011 by performing a two-way fixed-effects model.Findings This study’s findings support the hypothesis that when implemented simultaneously, internationalization and CSR have a negative synergistic impact on a restaurant firm’s value performance.Practical implications Restaurant managers might need to inquire thoroughly into the timing and content of CSR investment strategies while entering into new international markets. Restaurant executives may additionally need to focus more on effective risk management than other issues (e.g. growth or reputation) when developing both internationalization and CSR strategies simultaneously.Originality/value By suggesting and demonstrating a negative synergistic effect of internationalization and CSR on a firm’s value, this study presents new and unique insights into previous research regarding the combined effect of the two strategies. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this study is to invoke prospect theory to construct an empirical framework to predict idiosyncratic risk, and argue that when a firm performs better than its benchmarks, the firm tends to play safe by avoiding firm-specific risk to maintain its satisfactory performance level, but when a firm performs worse than its benchmarks, the firm may become aggressive with taking more risks to achieve an increased level of performance. Design/methodology/approach – This study tested the relationships between restaurant firms’ future idiosyncratic risk and the proposed firm financial characteristics. Heteroscedasticity- and autocorrelation-consistent (HAC) standard errors (Newey and West, 1994) were used to deal with potential problems of autocorrelations and heteroscedasticity. The standard error of residuals from the Fama-French three-factor model (Fama and French, 1993) was estimated to proxy for restaurant idiosyncratic risk. Findings – The main analysis reveals that five financial characteristics are significant predictors for restaurant firms’ future idiosyncratic risk in accordance with the proposed, negative relationship based on the prospect theory. Practical implications – Managers may predict their competitors’ future risk-taking behaviors using the current study’s findings, which will provide competitive advantage in a highly competitive business environment that we have now. Also, in practice, restaurant investors may consider findings of this study in forecasting future risks of their portfolio to help evaluate and revise their portfolios. Originality/value – First, this is a new endeavor of its kind dealing with the restaurant industry, filling the void in the literature in predicting the risk-taking behavior of restaurant firms in a time of crisis. Second, this study forms a prediction model that establishes “predictive causality” (Diebold, 2001) motivated by prospect theory. Third, building upon prior research, this study comprehensively examines relationships between the firm characteristics that capture firm-specific strategies (Ou and Penman, 1989) and the idiosyncratic risk that are “associated with firm-specific strategies” (Luo and Bhattacharya, 2009) in a restaurant setting. Finally, the findings of this study bear significant implications for practitioners and other parties of interest. [ABSTRACT FROM AUTHOR]

Despite an increasing number of hospitality studies on the link between corporate social responsibility (CSR) and corporate financial performance (CFP), the literature has predominantly focused on the CSR–CFP relation without considering moderating factors. Consequently, the current study introduces firm size as a potential moderator on the CSR–CFP relationship. Performing a two-way fixed-effects model by firm and year with Newey-West standard errors, this study finds that firm size moderates the effect of positive CSR on CFP while it does not moderate the effect of negative CSR on CFP in the U.S. restaurant context. [ABSTRACT FROM AUTHOR]

This study explores a relationship between a restaurant firm’s social media activity and firm value. Although social media have become significant in restaurateurs’ communications with existing and potential customers, the actual financial consequences thereof seem unclear, and little empirical evidence is available. This study’s findings suggest a positive and linear effect of restaurant firms’ activities in social media on firm value (Tobin’s q ) after controlling for several firm characteristics. [ABSTRACT FROM AUTHOR]

Abstract: As customers become more health conscious and governments create legislation requiring restaurants to provide nutrition information, the restaurant industry can no longer ignore demands for healthful eating environments. This study considers providing healthful food options and nutrition information as strategies for creating healthful eating environments at restaurants, and aims to develop a theoretical explanation of consumer reactions to such actions that incorporates perceived corporate social responsibility. Data were collected using a between-subjects experimental design with scenarios. The results show that customers perceive restaurants to be socially responsible when they are provided with healthful foods and nutrition information; highly health-conscious customers react more strongly to provision of healthful foods than their counterparts. Consequently, customers have favorable attitude toward and high willingness to visit restaurants providing healthful foods and nutrition information. Restaurateurs should consider taking such initiatives to entice more customers and develop a socially responsible image. [Copyright &y& Elsevier]

Abstract: Internationalization has been an important strategy for many restaurants, and decisionmaking process to internationalize is complicated. This study includes a firm''s financial performance, degree of franchising, and restaurant-type as factors to influence a restaurant''s expansion into international markets. The generalized least squares (GLS) random-effect model was employed to examine the relationships including publicly traded U.S. restaurants during 1990–2010. The findings suggest a curvilinear, inverted, U-shape relationship between the industry-relative Tobin''s q and the degree of internationalization (DOI), and a positive impact of franchising on the DOI. Regarding restaurant-type, compared to the mix-type restaurants, full-service restaurants are less likely to expand operations to international markets. Based on the results, this study provides theoretical and practical implications and suggestions for future research. [Copyright &y& Elsevier]

Abstract: This study explores the influences of CEOs’ dual roles (CEO duality) on firm performance, specifically in the U.S. restaurant context based on the stewardship theory. The study''s preliminary examination investigates the main effect of CEO duality on restaurants’ financial performances. Next, the research tests the primary hypothesis of a moderating effect of restaurant type on the relationship between CEO duality and firm performance. More specifically, this study proposes that CEO duality has greater positive effects for full-service restaurants than quick-service restaurants. Findings of this study suggest that CEO duality, in general, contributes to restaurants’ improving performances and also support the proposed moderating effect on the relationship between CEO duality and firm performance. By incorporating the restaurant industry''s idiosyncratic characteristics into the CEO duality argument and the restaurant type into the model, this study makes unique contributions to the general governance literature. [Copyright &y& Elsevier]

Abstract: This study examines the role played by economic conditions (recessionary periods) on the link between corporate social responsibility (CSR) and corporate financial performance (CFP) in the U.S. restaurant industry. The choice of industry setting is based on the fact that the restaurant industry is subject to consumer discretionary expenditures and is thus highly sensitive to the state of the economy. This study further examines the relationship between CSR and CFP by dichotomizing CSR activities based on whether they are related to the firm''s core operations or not, thus parsing out the effect of operations-related (OR) and non-operations-related (Non-OR) CSR activities, providing a more nuanced explanation of how some CSR activities may be more beneficial than others, to firm value in hard economic times. [Copyright &y& Elsevier]

Purpose – This study sets out to examine the potential curvilinear relationship between capital intensity and firm value for the US hospitality industry, specifically including publicly traded US hotels and restaurants, during the period 1990-2008. Design/methodology/approach – This study performs a pooled regression analysis to examine the proposed relationship. The sampled companies are from the period 1990-2008, consisting of 281 and 1,406 observations for the hotel and restaurant industries, respectively. The study additionally performs the analysis for the 1990s and the 2000s separately for a comparison purpose. Findings – The findings support the U-shaped relationship between capital intensity and firm performance during the 2000s for both hotels and restaurants, while no relationship exists during the 1990s. Research limitations/implications – While the results may not be generalizable to private or non-US hotels and restaurants, the findings should provide hotel and restaurant executives and managers with valuable information for developing their strategies with regard to the capital intensity level. Originality/value – Based on the two perspectives regarding capital intensity's impact on a firm (i.e. positive and negative), a possible proposal suggests that the relationship between capital intensity and a firm's value may not be linear, but possibly curvilinear. Considering the importance of capital intensity in the hospitality industry, examinations of the issue would be beneficial for the hospitality industry. [ABSTRACT FROM AUTHOR]

Abstract: During the recent and ongoing economic turmoil, countless businesses have been facing financial distress and many have filed for bankruptcy. This issue is especially critical for the restaurant industry due to restaurants’ sensitivity to economic fluctuations. Therefore, the purpose of this study is to examine the financial distress issue in the U.S. restaurant industry. In particular, the study examines a moderating effect of capital intensity on the relationship between a firm''s leverage and degree of financial distress. The dataset includes publicly traded U.S. restaurant firms during the period 1990–2008. The study measures the degree of financial distress by modified Z-scores, and findings suggest a positive moderating effect of capital intensity on the relationship between leverage and financial distress. [Copyright &y& Elsevier]

Among several industry characteristics, capital intensity plays an important explanatory role for the restaurant industry. A restaurant needs physical buildings, equipment, fixtures, and furniture all ready at the launch of a business; these require considerable capital expenditures. Considering capital intensity as a significant restaurant industry characteristic, educators and practitioners who focus on this industry are strongly encouraged to investigate the implications and effects of capital intensity in food service operations. The purpose of this study is to examine the effect of capital intensity on a firm's value performance in the U.S. restaurant industry. The investigation period spans from 2000 to 2008. Findings suggest that capital intensity has a negative effect on U.S. restaurant firms' value performance. [ABSTRACT FROM AUTHOR]

The study's first objective is to discuss the potential of mobile information services' enhancement of the restaurant industry's revenues, and second, to provide practical implications for restaurant managers who wish to capitalize on the opportunities mobile information services offer. According to the survey findings, managers can expect that about a half of their young customers may consider participating in offered services; potential users of restaurants' electronic information prefer receiving discounts, incentive information, and electronic coupons, and prefer not to receive gourmet menu information, pictures, or videos. Potential users of the mobile information services are somewhat reluctant to provide personal information. [ABSTRACT FROM AUTHOR]

In spite of growing concern for corporate social responsibility (CSR) in various industries including the hospitality industry, the relationship between CSR activities and financial performance is a rarely examined subject in the hospitality context. Especially, research measuring the separate impacts of positive and negative CSR activities on companies’ financial performances remains, as yet, unconsidered. Thus, this study examines different impacts of positive and negative CSR activities on financial performance of hotel, casino, restaurant and airline companies, theoretically based on positivity and negativity effects. Findings suggest mixed results across different industries and will contribute to companies’ appropriate strategic decision-making for CSR activities by providing more precise information regarding the impacts of each directional CSR activity on financial performance. [Copyright &y& Elsevier]

Given the importance of a firm''s performance, which is of significant interest to many groups of people including management, shareholders and governments, this study aims to examine the impact of brand recognition and brand reputation on firm performance within the U.S. multinational restaurant company context. The study findings suggest that brand reputation, in general, has a positive influence on a firm''s value performance but no significant relationship with accounting performance. Brand recognition shows no significant relationship with both value and accounting performance measures controlling for the degree of internationalization of a multinational restaurant company. [Copyright &y& Elsevier]

Abstract: A company's financial performance is of keen interest to many groups of people, including management, employees, shareholders, government, and so on. Although franchising has been one of the most common strategies to maximize a firm's financial performance in the restaurant industry, little research has been conducted regarding the relationship between the degree of franchising and the restaurant firm's financial performance. This study initially proposed a sigmoid relationship between the degree of franchising and the restaurant firm's financial performance based on the diversification theory. Findings, however, do not fully support the sigmoid relationship; rather a more quadratic or inverted U-shaped relationship was found. [Copyright &y& Elsevier]

Manipulation of earnings by publicly traded firms is a well-known phenomenon and the subject of considerable attention in both academic and trade circles. Despite widespread attention to this topic in financial literature, it has received scant attention in the restaurant industry. This research assesses whether earnings manipulation in the publicly traded restaurant firms are being rewarded by the capital markets. We have an a priori expectation that firms that do not manipulate earnings will have higher returns. However, our results indicate a significant and positive relationship between earnings manipulation indicators and stock price increases. [ABSTRACT FROM AUTHOR]

• This study examines the relationship between various pre-pandemic firm characteristics and stock price reactions to COVID-19. • This study employed GEE for analyses using STATA 15.1. • Restaurant firms with larger size, more leverage, more cash flows, less ROA, and more internationalization are more resilient to stock declines. • Dividend, franchising, institutional ownership, and managerial ownership did not show a significant moderating effect. • This study contributes to the literature by providing insights into drivers of restaurant firm's stock returns during the COVID-19 shock. The current study examines how the effect of COVID-19 on U.S. restaurant firms' stock returns varies according to the firms' pre-pandemic characteristics by employing three firm-level dimensions (financial conditions, corporate strategies, and ownership structure). Employing 795 firm-year observations obtained from annual reports and other databases, this study found that restaurant firms with past characteristics of larger size, more leverage, more cash flows, less ROA, and more internationalization are more resilient to stock declines reacting to COVID-19 than otherwise similar firms. Whereas, dividend, franchising, institutional ownership, and managerial ownership did not show any significant moderating effect on the relationship between COVID-19 and stock returns. This study sheds light on the research topic by providing insights into drivers of restaurant firm's stock returns during the COVID-19 shock. Future studies can employ the variables and method used in the current study to extend the understanding of the issue. [ABSTRACT FROM AUTHOR]

This study examines the health halo and horn effects in the context of two fast food brands commonly associated with healthy and unhealthy food (i.e., Subway and McDonald's). Health halo is consumers' tendency to overestimate the healthiness of certain food categories or items based on a single claim, whereas health horn is the tendency to underestimate it. Specifically, we investigated the moderating effects of nutritional information disclosure and dietary restraint on consumers' behavioral intentions. Two items from the McDonald's and Subway menus each served as stimuli. They represented health halo confirmation (Roast Chicken sandwich) or disconfirmation (Italian Spicy sandwich) and health horn confirmation (Big Mac burger) or disconfirmation (McSpicy Cajun Burger). This study employed a 2 (nutritional information: present vs. absent) × 4 (menu item type: a health halo or horn associated with Subway or McDonald's menu items with favorable and unfavorable nutritional profiles) and 2 (dietary restraint: restrained eaters vs. unrestrained eaters) × 4 (menu item type: a health halo or horn associated with Subway or McDonald's menu items with favorable and unfavorable nutritional profiles) mixed factorial design. Participants were randomly assigned to one of two experimental conditions (nutritional information: present vs. absent) and presented with all four menu items. There was a decrease in behavioral intentions toward all menu items except the one representing health horn disconfirmation. In particular, behavioral intentions were most substantially weakened for the item that entailed a health halo disconfirmation (Italian Spicy sandwich). The findings not only delineate the different practices companies adopt but also underscore the importance of nutritional information disclosure in helping consumers make healthier food choices. [ABSTRACT FROM AUTHOR]

This study, by performing a path regression analysis, examines a mediating effect of customer satisfaction between corporate social responsibility (CSR) activities and firm value for US hotels and restaurants. Further, the study differentiates positive and negative CSR activities in the analysis. Findings suggest that the customer satisfaction does not play a role of a mediator between the two factors for both hotels and restaurants. [Copyright &y& Elsevier]

As internationalization has been widely implemented throughout the tourism industry, it is important to understand what motivates a firm to internationalize its business. Thus, this study examines the motivation for internationalization based on the neoinstitutional theory. This study employs a hierarchical linear modeling (HLM) to test the proposed hypotheses, using the annual firm-level data of the tourism industry, and finds that tourism firms including casinos, hotels, and restaurants are demotivated to diversify their international expansion into different countries as their competitors increase the scope of countries in which they operate. However, if a firm perceives its competitors as speeding up the process of internationalization, that firm will also increase the pace of internationalization. In addition, this relationship between competitors and focal firms' internationalization varies according to environmental conditions (i.e., dynamism, complexity, and munificence). The findings of the study contribute to the internationalization and tourism literature. • This study examines the motivation for internationalization. • This study employs a hierarchical linear modeling (HLM) to test the hypotheses. • Tourism firms diversify the internationalization less as their competitors do more. • If competitors speed up the pace of internationalization, the firm also speeds up. • Various environmental conditions play a moderating role on the motivation. [ABSTRACT FROM AUTHOR]