The Effect of Corporate Sustainability Initiatives on the Financial Performance of Tourism Firms in Tanzania

Authors

  • Said Juma Suluo University of Dar es salaam
  • Wineaster Anderson University of Dar es salaam
  • Tommy Andersson, University of Gothenburg,
  • Lena Mossberg, University of Gothenburg
  • Mussa Juma Assad University of Dar es salaam

Keywords:

Corporate Sustainability, Financial Performance, Tourism, Tanzania, Sub Saharan

Abstract

This study investigated the effect of corporate sustainability initiatives on the financial performance of tourism firms in Tanzania. The data was collected from 304 firms comprising of tour operators and hotels operating in Tanzania. The data was analysed using structural equation modelling (SEM) technique. The results indicated that involvement in the community, economy, and eco-efficiency initiatives leads to higher financial performance of tourism firms. Specifically, involvement in community initiatives had the highest predictive power on financial performance while eco-efficiency initiatives had the lowest. The results imply that the influence of corporate sustainability initiatives on firm performance, in the study context, increases with increasing firm involvement in initiatives that have immediate benefits on community interests and little immediate benefits to firm interests – i.e. no quid pro quo. Conversely, the influence of firm corporate sustainability initiatives on firm financial performance is reduced with increased firm involvement in initiatives that have immediate benefits to firms’ self-interest and little immediate benefits to community interests. This study is one of the early attempts to examine the effect of corporate sustainability dimensions in the tourism industry in a Sub Saharan African (SSA) context. The study identifies important characteristics of corporate sustainability initiatives which determine the extent of initiatives’ influence on firm financial performance. The findings imply that firm managers in the SSA context need to design their corporate sustainability initiatives with a higher orientation towards initiatives that serves community interests more than firms’ self-interests.

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Author Biographies

Said Juma Suluo, University of Dar es salaam

University of Dar es Salaam Business School, Dar es Salaam, Tanzania

Wineaster Anderson, University of Dar es salaam

University of Dar es Salaam Business School, Dar es Salaam, Tanzania

Tommy Andersson, , University of Gothenburg,

University of Gothenburg, School of Business, Economics and Laws, Gothenburg, Sweden, School of Business, Economics and Laws, Gothenburg, Sweden

Lena Mossberg, , University of Gothenburg

University of Gothenburg, School of Business, Economics and Laws, Gothenburg, Sweden

Mussa Juma Assad, University of Dar es salaam

University of Dar es Salaam Business School, Dar es Salaam, Tanzania

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Published

2020-06-30

How to Cite

Said Juma Suluo, S. J. S., Anderson, . W., Andersson, T. ., Mossberg, , L., & Assad, . M. J. (2020). The Effect of Corporate Sustainability Initiatives on the Financial Performance of Tourism Firms in Tanzania. Operations Research Society of Eastern Africa, 10(1), 23-42. Retrieved from https://orseajournal.udsm.ac.tz/index.php/orsea/article/view/102