The COVID-19 pandemic's effects on SMEs and travel agencies: The critical role of corporate social responsibility.

This study is based on the system resilience framework, which outlines the aspects of community behavior, employees, the environment, history, and corporate social responsibility. We used a partial least squares structural equation model to evaluate a sample of 300 Vietnamese SMEs and travel agencies. We discovered that SMEs' strategies positively influence performance and are co-created with corporate social responsibility. The dependability of internal integrity was then determined. The empirical results showed that the overall confidence index for all facilities ranged from 0.70 to 0.95, with values ranging from 0.809 to 0.931. Furthermore, the A and Cronbach's alpha reliability values ranged from 0.70 to 0.90. As a result, the reliability of internal consistency was established. The convergence validity of the configurations was assessed by comparing the extracted mean values of variance (AVE), which, for all configurations, exceeded the limit of 0.50. This approach emphasizes the impact of corporate social responsibility practices on communities, the environment, and heritage.

Introduction

The COVID-19 pandemic has significantly impacted the global tourism industry, with the number of foreign travelers dropping by 900 million (72 percent) from January to October 2020 and the industry reverting to pre-pandemic levels (OMT, 2020). Following the initial ban imposed by national authorities, the tourism sector gradually and partially resumed operations at various times and modes of operation under the current pandemic and local restrictions (Dvorsky et al., 2021). On the other hand, travel and hospitality remains one of the pandemic’s most affected industries (Sathana et al., 2021). Countries have taken various measures (ranging from financial assistance to job retention incentives) to boost tourism and mitigate the adverse impact of the pandemic from the start (Handoyo et al., 2021). Simultaneously, travel operators have begun implementing novel methods to mitigate the negative impact on sustainability (Ndubisi et al., 2021, Le et al., 2021a, Le et al., 2021b, Le et al., 2021c).  Although research on the effectiveness of government policies continues to grow, data on the effectiveness of travel agencies’ COVID-19 crisis measures remain scarce (see Tryphone and Mkenda, 2022, Cavallo et al., 2021; Srivastava and Kaushik; Lee et al., 2021). Beyond case-by-case and descriptive research, it is critical to provide a theoretical explanation and update current knowledge, as paradigms may have shifted since the beginning of the pandemic (Endris and Kassegn, 2022). Many academics (e.g. Bagale et al., 2021) believe that the current crisis strategy can help to improve the tourism industry by promoting sustainability and corporate social responsibility (CSR). These findings imply that, as a result of the crisis, only ethical and sustainable tourist businesses will be able to survive and thrive (Adhikary et al., 2021). As a result, in today’s pandemic environment, tourism research must concentrate on the performance impact of tourist organizations’ CSR efforts (Correia et al., 2021).

In this study, we examine the impact of CSR by discussing how 300 of the 24,576 Vietnamese SMEs that reopened in May 2020 used various techniques to shift the paradigm, taking note of the first indications. Data were gathered through a survey of 967 SMEs. Using geographical sampling, we evaluated data from 300 respondents using the structural model of the partial least squares equation (PLS-SEM). Based on Scott and Irwin (2009),  we developed a model that compares the concept of system resilience and active and passive tourist crisis recovery techniques (Nartey and van der Poll, 2021). According to our research, SMEs’ success depends on their ability to reconcile economic performance with the sustainability of socio-cultural and environmental values (Bach et al., 2021, Le et al., 2021a, Le et al., 2021b, Le et al., 2021c). We believe that all aspects of corporate social responsibility (products, workers, the environment, the community, history) are critical. Chatterjee et al. (2021) tie active and passive approaches and performance together. Only if the chosen strategy promotes corporate social responsibility, i.e., actively contributing to the system for a successful tourist co-creation experience, will it positively impact the company’s performance resilience.

Hashim et al. (2021) demonstrate why local tourism activities are more sustainable than other tourist activities and resilient to crises. Furthermore, while Kijkasiwat et al. (2021) focus on agrotourism enterprises, demonstrating the importance of corporate social responsibility may assist other types of tourism businesses in developing recovery strategies. As a result, the study’s findings aid discussions about the importance of developing tourist stimulation initiatives that consider long-term sustainability rather than relying on a short-term strategy (Khan et al., 2021, Rojas et al., 2021). Our findings show that implementing ethical business practices is critical to successfully translating company strategy into commercial performance. Furthermore, the findings provide tourism businesses with practical recommendations on selecting and implementing financial success strategies in the wake of a crisis.

The rest of this paper is divided into the sections below:

Section 2 provides the literature review and the research hypotheses, followed by Section 3, which explains the research model and hypothesis proposal. Section 4 presents the study’s empirical findings and discussions. The last section provides the conclusions and policy implications.

Literature review and the research hypotheses

The study considered the responses to crises that have affected the hospitality and tourism industries in recent decades, from illnesses such as SARS to financial and natural disasters. Woodard, 2021, Heider et al., 2021. According to a previous article, several earlier studies assessed the impact of the COVID-19 crisis on the hotel and tourism industries (Alles et al., 2021). According to this research, the impact of the COVID-19 pandemic on tourism is more severe and widespread than the impact of previous pandemic crises; see Chien et al., 2021a, Chien et al., 2021b. The impact of the COVID-19 crisis on tourism businesses has been extensively researched. Ikram and colleagues (2019) show that with revenues down by 60%, it is predicted that 25% of Spanish tourist businesses will face financial difficulties. In Alonso-Martínez et al. (2020),  84.4 percent of respondents rated the economic effect as the most significant negative business impact of COVID-19, with pandemic-related concerns ranking second. However, according to available data, COVID-19 has not exerted the same impact on all tourism businesses (Adam and Alarifi, 2021). Corporate (e.g., limited debt), national (e.g., low-level individualism), and public policy (e.g., need to stay at home) characteristics were all present in a diverse sample of travel companies affected by fluctuations in value during the pandemic (Auerbach et al., 2021). Furthermore, tourist and hotel organizations are increasingly researching specific innovations and management topics, such as marketing techniques (the promotion and promotion of new goods and services), cost savings, organizational changes, innovations in business models, and so on (Almagrabi et al., 2021, Rivera-Ferre et al., 2021, Naeem et al., 2021). Finally, multiple analyses were carried out to investigate the relationship between crisis management activities and tourist enterprises’ performance (Nieuwenhuijsen, 2021).

Tourism small- and medium-sized enterprises

Previous research has discovered that some tourist companies are more resilient and efficient than others regarding recovering quickly and adapting to new requirements (Alizadeh and Aghsaeifard, 2021). Experts compared SMEs in terms of passive and active actions to explain differences in business outcomes (Gumashta and Gumashta, 2021). Passive tactics are used to maintain a firm’s market position by implementing cost-cutting measures (such as layoffs), canceling initiatives, and closing auxiliary operations (Wani et al., 2021). SMEs’ marketing and innovation strategies focus on attracting new customers, increasing the value of current customers, and investing in new technologies (Ibañez et al., 2021, Tyagi et al., 2021, Le and Ikram, 2021d). Active SME strategies have been shown in several studies to have a more significant positive impact on tourist company performance than passive strategies (Dotan et al., 2022, Raza et al., 2021). The same findings have been applied to crises, with a few significant differences. For example, Verma et al. (2021) show that the SME strategies alone have a beneficial influence on restaurant competitiveness in times of crisis, but the passive strategy results in a vicious spiral. Cutting costs and services lowers the customer’s perception of quality and performance. Similarly, hotels that promote customer loyalty and other preventive measures are better prepared for crises, even though cost cuts hurt competition (Ferrannini et al., 2021).

Travel agency tactics to mitigate the adverse effects of the COVID-19 pandemic are still in the early stages of research, with limited evidence of success (Nesteruk, 2021). However, we contend that distinguishing between responsiveness and SME strategies is critical in explaining contemporary tourist company behavior. SMEs in the hotel sector have used various techniques to deal with new challenges during the COVID-19 pandemic, according to (Ikram et al., 2019). Some create products and services, seek new market opportunities, and create new revenue streams, whereas others are more passive and solely concerned with adhering to health and safety regulations.

Similarly, Ghasemy Yaghin and Sarlak (2019) discovered that hospitality firms, such as hotels, restaurants, and food services, have developed response tactics that emphasize “contactless” services, disinfection, and seat distance, but they also employ cutting-edge technology. Furthermore, in the early stages of an outbreak, SMEs prefer passive tactics over proactive measures (Haleemunnissa et al., 2021). Anser et al. (2020) discovered the effectiveness of the methods used in the hotel industry in the wake of the pandemic, such as deferring maintenance, closing certain facilities and licenses, delivering new products and services, and marketing in new market sectors, which were all frequently utilized. These exercises once again highlight the distinction between passive and active behavior. Data from ERIA (2011) show that hotel managers gradually transitioned from entirely passive to more active behavior after the initial phase of the pandemic. Chathukulam and Tharamangalam (2021) examined hotels and tourism groups’ passive (following cleaning procedures and cost-cutting measures) and active (investing in digitalization and adopting new technology) actions. Finally, certain restaurants, pubs, and hotels are looking to innovate and digitize to improve their economic models and reclaim profitability, reducing the constraints imposed by social distancing and other sanitary measures that must be avoided (Pappas, 2021). There is no evidence that these active and passive measures have any effect on performance at this time. Furthermore, given the distinct characteristics of the modern environment, it is difficult to apply the preliminary findings of the tourist crisis management plan research to the current COVID-19 pandemic. The COVID-19 pandemic has shown more complex and disastrous consequences than previous crises (Jarnagin et al., 2021). Furthermore, the current pandemic is ongoing, and its end is not yet foreseen (Melo-Oliveira et al., 2021). As a result, the travel agency remains in crisis mode, rather than change mode (Korompoki et al., 2021).

Given the existing complexity crisis, we apply the concept of system resilience to investigate the impact of active and passive tactics on the performance of tourist firms. By treating the organization as a network node, this model systematically explains why one travel agency is more robust than another (Malinis et al., 2021). Complex crises such as the current pandemic have far-reaching implications for the entire network. As a result, a single organization’s invention or evaluation of techniques should not be separated from the company’s engagement with other network members (Furqan et al., 2021). In line with this systematic approach, organizational research emphasizes the critical quality of establishing solid social structures or social capital to withstand such crises (Kenny and Mallon, 2021). In the tourism and hospitality industries, this concept has proven to be quite effective (Correia et al., 2021). This study pays special attention to the function of corporate social responsibility, which is covered in greater depth in the following section.

CSR identification

Corporate social responsibility is becoming increasingly important in identifying an increasing number of tourism firms (Rivera-Ferre et al., 2021, Le et al., 2021a). Previous research has established two opposing perspectives on corporate social responsibility. According to this conventional or regulatory viewpoint, corporate social responsibility is the “correct way” for a company to succeed (Auerbach et al., 2021, Le et al., 2021b). In terms of tools, we believe that firms must embrace corporate social responsibility to improve their performance (Adam and Alarifi, 2021, Le et al., 2021c). According to (Anser et al., 2020), the current pandemic emphasizes the importance of instrumental approaches, and the previous paradigm is no longer viable. Some studies contain facts and complaints to help travel agents to respond to COVID-19 pandemic issues through CSR. Some governments encourage and educate large local businesses about corporate social responsibility, which benefits tourism destinations. A recent study found that stakeholders had positive feelings about the company five days after a news item was published, emphasizing the company’s social responsibility goals related to COVID-19 (Almagrabi et al., 2021). Other research has discovered that assessing a hotel’s corporate social responsibility benefits employee attitudes and actions (Jarnagin et al., 2021). Because CSR is a complex structure with varying effects over time and space, it is also critical to examine which factors impact performance most during the current pandemic (Wani et al., 2021). Wang et al. (2019) and our current study propose a five-dimensional view of tourist organizations’ CSR activity, encompassing components related to communities, employees, the environment, history, and goods. According to this definition, the community component of CSR refers to a company that helps the local community by purchasing goods and resources from local suppliers, employing local citizens, and encouraging community growth and initiatives (Melo-Oliveira et al., 2021, Le and Ferasso, 2022). CSR practitioners demonstrate the company’s concern for employee welfare by establishing strong connections with employees, providing fair compensation, ensuring flexibility, and paying attention to their circumstances (Chathukulam and Tharamangalam, 2021). Organizations that strive to reduce the environmental impact of their work, such as by recycling materials and resources, adhere to the environmental component of CSR (Melo-Oliveira et al., 2021, Le et al., 2021b, Le and Ferasso, 2022). The heritage component of CSR preserves local history by using locally sourced materials in construction, preserving old structures, and educating customers on the importance of preserving local history. It exemplifies the firm’s efforts (Chathukulam and Tharamangalam, 2021). Finally, the merchandise component demonstrates the company’s dedication to product quality, safety, and health (Khanzode et al., 2021).

Research hypotheses

This study used the SMEs in the tourism industry as a case study to examine the effects of COVID-19 on them. These SMEs are inextricably linked to the local network by definition, as they strive to maximize economic returns while preserving local social, cultural, and environmental qualities (Adam and Alarifi, 2021). In the 1980s, the focus of SMEs shifted from agriculture to tourism. This resulted from the farm-to-farm transition (which is not a new phenomenon). Farmers must develop entrepreneurial and managerial skills to participate in agricultural tourism (Singh et al., 2021). However, the degree to which agriculture and tourism industries are integrated varies by country (Correia et al., 2021).

SMEs remain a somewhat ambiguous concept because they are frequently used to include all types of tourism in rural regions and are sometimes referred to as tourism rather than agriculture. According to Correia et al. (2021), SMEs take place on functional farms and involve a direct connection between visitors and the private sector. This is based on a significant debate over the definition of SMEs, a definition of what is required for tourism-related activities, and a definition of what is required for tourism-related activities (Handoyo et al., 2021). This kind of participation could be genuine. It can be man-made (for example, tourists directly participating in the harvest) or natural (for example, visitors participating directly in the harvest) (Naeem et al., 2021). In both scenarios, contact between visitors and farmers results in a robust co-creation process (Alles et al., 2021). As a result, rural tourism on underutilized farms is not included. The primary reason for this is that SMEs believe that activities performed on underutilized farms should not be considered (Pappas, 2021). The law specifies that only farmers may establish an SME and expressly states that SMEs’ activities must be related to agriculture (Law No. 96/2006).

Agro-tourism on farms is a new type of ecotourism because it combines environmental conservation, social and cultural sustainability, educational and learning opportunities, and community engagement (Jarnagin et al., 2021, Le, 2022). To summarize, SME entrepreneurs are motivated not only by personal interests but also by improving the quality of life in their communities (Alles et al., 2021). This is achieved by preserving and sharing local values with visitors (Malinis et al., 2021). As a result, agro-tourism companies prioritize the long-term viability of their local systems and participate in CSR activities in five areas: community, employees, the environment, history, and raw materials (Raza et al., 2021).

As a result, a study model based on a system resilience perspective reveals that the active and passive techniques used by SME businesses to deal with the impact of the COVID-19 pandemic have only one positive effect on performance: they improve the initial CSR behavior of the community, workers, environment, heritage, and goods. As a result, corporate social responsibility behavior allows for the successful co-creation of experiences with visitors, who actively participate in activities that promote the exchange of local values and traditions (for example, agricultural activities) (Tyagi et al., 2021). As a result, SMEs benefit from contributing to the long-term viability of local systems while maintaining the values associated with rural life. These materials and information are used to improve visitors’ co-creation experience and performance (Ferrannini et al., 2021, Wani et al., 2021). Based on these considerations, SME strategies suggest that contributing to corporate social responsibility can help businesses to perform better, and assert that:

Hypothesis 1

Corporate social responsibility boosts the profitability of SMEs. When a company is forced to adapt to a new situation, it employs passive tactics, which have inherent instability and short-term features that contribute to poor performance (Heider et al., 2021). This may be advantageous if the response plan is to focus the remaining resources and the most crucial company objectives and activities through cost reductions and resource optimization (Ferrannini et al., 2021). In this case, the response method improves performance by allowing the corporation to eliminate inefficient processes and more efficiently allocate resources (Singh et al., 2021). As a result, we predict that by focusing resources on core values or CSR, SMEs’ responsive technology will negatively impact performance both directly and indirectly. As a result, the following assumptions are made:

Hypothesis 2

Reactive tactics have a direct negative impact on SMEs’ business performance (H2a) and a positive mediated effect on SMEs’ business performance (H2b) through CSR and co-creation.

Methodology and data

Data and variables description

Using a transversal methodology, we conducted a study on a random sample of Vietnamese SMEs. SMEs are defined in Vietnamese law as “the lodging activity carried out by agricultural entrepreneurs through the use of firms associated with agriculture, forestry, and animal husbandry” (Law 96/2006). Legal forms of entertainment include farm accommodation and open areas, food and drink produced primarily from agriculture and other local farm goods, product tastings, and entertainment. Culture, education, sports, strolling, and horseback riding are all options for educating visitors while preserving the area’s countryside and rural heritage. Furthermore, according to the same rule, a farmer’s time spent on agricultural operations must take precedence over his time spent on SME activities. As a result, Vietnamese SMEs must focus on farms, with agricultural and SME operations inextricably linked (Singh et al., 2021). In 2019, 24,576 farms in Vietnam were granted permission to engage in SME activities (4.1% higher than in 2018). With nearly 3.7 million registered tourists in 2019, 82% of these businesses provided lodging and hospitality services. Domestic tourists accounted for 1.9 million of the total (Malinis et al., 2021).

A total of 967 SMEs were selected at random from a publicly available list of approved SMEs. The data were collected in 2020, between the end of October and the beginning of November. Summer represents the majority of visitor accommodations in Vietnam throughout the year. For example, in 2019, the months of June to September accounted for 59.53 percent of the total annual overnight stays (http://dati.istat.it/). The government imposed a nationwide lockdown from March 10 to May 4, 2020. The second phase has begun, and the region’s liquidity has been restored. On June 3, “Phase 3” began, easing travel restrictions and allowing citizens to visit other areas and countries (Naeem et al., 2021). SMEs, similarly to other businesses, had to adhere to social distancing and other health measures; however, they were allowed to operate during the summer. Each of the 967 farms received an email outlining the research topic and encouraging them to participate in the survey. Two weeks later, the individuals who did not respond to the initial invitation received a reminder email. A total of 300 surveys were completed, with a response rate of 20.58 percent. To determine whether there was any response bias, the t-test and two-tailed t-test were used to compare early and late responses for several critical variables (Jarnagin et al., 2021). However, the self-selection of respondents was eliminated, and the number of people who favored CSR could be overwhelming. Table 1 summarizes the sample.

Table 1

Selected variables description.

Study variables	Occurrences (n = 300)
Size
<5 ha	32 (16.1%)
5–9.99 ha	46 (23.1%)
10–19.99 ha	38 (19.1%)
20+ hectares	83 (41.7%)
Years of operations
<5 years	27 (13.6%)
5–9 years	37 (18.6%)
10–19	75 (37.7%)
20–29	47 (23.6%)
30+	15 (7.4%)
Total employees
<3	59 (29.2%)
3–5	88 (51.0%)
6+	46 (19.2%)
Offered confirmed Services
Employ housing	177 (79.8%)
Products total sales	144 (70.2%)
Food serving	110 (59.4%)
Educational related events	111 (49.8%)
Tours	55 (23.9%)
Sport related events	59 (28.3%)
SMEs	61 (6.4%)

Measures and data analysis

The survey was tailored to the survey setting and included measurements from previous surveys (Pappa et al., 2021, Heider et al., 2021).  It was a comparison tool for active and passive techniques (2018). CSR, using a previous scale, is defined as a secondary structure composed of five low-level components (LOC) (CSR community, CSR personnel, CSR environment, CSR assets, and CSR goods). After the extra elements were removed, the scale was reduced to 17 components. According to Wang and his coworkers (2019), the type of hierarchical model was reflection, and the more abstract concept of CSR was represented in five specific LOCs (Chatterjee et al., 2021). Following Mathis and his coworkers, four projects were used to quantify the co-creation experience. According to previous work, tourists actively contribute to developing and training their trip experience (Bagale et al., 2021). All of these elements were quantified using a 5-point Likert scale. Finally, we evaluated a company’s success using three indicators developed by Anser et al. (2020) and widely used in tourist business research (Adam and Alarifi, 2021).

The following control variables were also included in the analysis: the number of employees and farm hectares as farm size, the number of years of sales experience as a measure of experience, and whether or not the farm had receptive facilities. Performance differences can disproportionately influence service modifications, which could explain the length of continuous operation. Smart PLS 3 is a data analysis program that employs structural modeling of the partial least squares equation (PLS-SEM) (Chien et al., 2021b). PLS-SEM is a non-parametric approach that makes no assumptions about distribution. The minimum sample size for PLS-SEM is ten times the maximum number of structural routes in a single structural model (Khanzode et al., 2021). As a result, the samples used in this study come very close to meeting this requirement. We created the second phase of CSR using a two-phase method. The scores of the five LOCs (CSR community, CSR workers, CSR environment, CSR assets, and CSR goods) were determined in the first phase. These values were used as a supplementary structure in the second phase to clarify the variables. We collected measurements during the simulation (Hashim et al., 2021). Previous research has recommended two distinct techniques for the two-step approach: non-continuous two- and two-phase techniques (Chatterjee et al., 2021). In this study, a discontinuous two-step technique was used. The model used this technique to generate an LOC score with no secondary components, which was then used to evaluate the secondary stage’s construction. The standard multi-element metric was used in the second phase to estimate additional model components (Bagale et al., 2021). This technique was chosen because it demonstrates the individual influence of each LOC and the factors’ combined impact. As a result, this strategy can help us to understand the impact of CSR but also the various effects of its five components (see Table 2).

Table 2

Reliability and validity statistics.

Study variable	Alpha values	A_rho	Compound (Reliability)	Variance values
SMEs strategies	0.710	0.722	0.815	0.525
Responsive strategies types	0.775	0.773	0.856	0.598
Performance values	0.806	0.806	0.885	0.720
Co-creation values	0.742	0.745	0.835	0.560
1. CSR (Community)	0.700	0.712	0.809	0.515
2. CSR (Employees)	0.889	0.915	0.931	0.817
3. CSR (Environment)	0.762	0.872	0.856	0.668
4. CSR (Heritage)	0.886	0.892	0.921	0.746
5. CSR (SMEs Products)	0.755	0.776	0.861	0.676
CSR	0.795	0.816	0.860	0.555

Results and discussion

LOC measurement model results

Because of the intuitive nature of all ideas, the indicator load, dependability of internal consistency, convergence validity, and identification validity were used to validate the measurement model (Lee et al., 2021). In the first phase, the LOC measurement model was evaluated (Dvorsky et al., 2021). All loads were greater than 0.70, except for four components whose values were slightly less than 0.70 (minimum load is 0.671), indicating adequate dependability (Khanzode et al., 2021). The dependability of internal integrity was then determined. The overall confidence index for all facilities ranged from 0.70 to 0.95, with values ranging from 0.809 to 0.931. Furthermore, the A and Cronbach’s alpha reliability values were in the 0.70 to 0.90 range (Correia et al., 2021). As a result, the internal consistency’s dependability was established (Chien et al., 2021b). Third, the convergence validity of the configurations was assessed by comparing the extracted mean values of variance (AVE), which, for all configurations, exceeded the limit of 0.50 (Woodard, 2021) (see also Table 3). Finally, the Fornell–Larcker criterion and the related non-uniform element–mass relationship were used to test the discrimination validity (HTMT). According to the data, the square root of the AVE for each building was greater than the greatest correlation with the other structures. The Fornell–Larcker criterion was satisfied (Chatterjee et al., 2021). Furthermore, none of the HTMT proportions exceeded 0.85 (Dvorsky et al., 2021) (see also Table 3). As a result, discriminative validity was demonstrated (Khanzode et al., 2021).

Table 3

Discriminant validity assessment using the HTMT criterion.

	1	2	3	4	5	6	7	8	9	10
SMEs strategies
Responsive strategies types	0.121
Performance values	0.199	0.322
Co-creation values	0.592	0.241	0.524
1. CSR (Community)	0.349	0.213	0.071	0.531
2. CSR (Employees)	0.172	0.183	0.187	0.288	0.461
3. CSR (Environment)	0.271	0.188	0.075	0.433	0.522	0.293
4. CSR (Heritage)	0.235	0.197	0.112	0.520	0.530	0.444	0.588
5. CSR (SMEs Products)	0.511	0.201	0.20	0.509	0.533	0.520	0.590	0.799
CSR	0.398	0.277	0.121	0.622	–	–	–	–	–

In step 2, the CSR abutment measurement model was evaluated. The load was the CSR–LOC correlation, and the CSR index was the five LOC values (Adhikary et al., 2021). Cronbach’s alpha (0.811), composite reliability (0.866), A (0.816), and AVE all demonstrated internal and convergent validity (0.555). The Fornell–Larcker criteria (correlation with other components: 0.481) and the HTMT ratio were also used to assess the validity of the discrimination (the highest HTMT ratio was 0.619).

Effect of CSR on SMEs

According to research (Endris and Kassegn, 2022), the more active a company’s CSR plan is, the more likely customers are to express positive feelings about the organization, and the more likely customers are to purchase a company’s items. Delaying the fulfillment of one’s social responsibilities may be interpreted as a passive response to one’s social responsibilities. Alternatively, public pressure may compel businesses to act responsibly. According to Dvorsky et al. (2021), delaying a company’s operational CSR time will encourage customers to believe that these measures are incompatible with the company’s original purpose of exhibiting social responsibility. When a company faces societal criticism, CSR performance may lead people to believe the company is hypocritical, obscuring the company’s and the brand’s image. Gao (2009) states that a positive attitude toward corporate social responsibility defines the CSR moment. Companies may participate in social responsibility activities at different times. However, no research has been conducted to determine how the timing of a company’s CSR activity influences a customer’s proclivity to purchase prepaid items. Prepaid purchases are made before the consumption of services and goods, and prepaid payments are deducted once clients have used their purchases (Chien et al., 2021b). When the value of the assets is unknown, pre-purchase has been shown to increase a company’s profitability (Malinis et al., 2021, Singh et al., 2021). Customers review the merchandise during the sales period. They will not purchase the product if the quotation is lower than the product’s price; however, if these customers are unsure of the product’s future worth, they will pre-purchase it (Pappas, 2021). By comparing the profit maximization methods of organizations that support and do not support prepaid purchases (Correia et al., 2021), according to research, businesses should use prepaid methods to boost earnings, especially if the market is volatile and uncertain.

An early study determined consumers’ perceived motivation and effectiveness for their organization’s CSR efforts (Dvorsky et al., 2021). Given the evidence that corporate social responsibility activities influence customer reactions, the timing of these activities also has an effect (for example, prepaid purchase intentions). There is a chance that it will occur. Consumers exposed to the COVID-19 pandemic early on (during the epidemic) were more aware of its severity than those exposed later (i.e., after the outbreak). As a result, a company that practices corporate social responsibility during a pandemic may project a more positive image to its clients than one that does so after the epidemic. Consumers are more likely to purchase a company’s products if they have a favorable first impression. We investigated whether the COVID-19 outbreak influenced customers’ purchasing decisions directly from hotels and restaurants rather than using prepaid cards. As a dependent variable, we used the customer’s desire to make a prepaid purchase of hotel items.

Demographic information

Table 4 shows the results of the demographic information of this study:

Table 4

Social results.

N= 110	Frequency (means)	Percentage (standard deviation)
Age	30.13	7.32
Gender
Male	49	44.5%
Female	61	55.5%
Education
Senior high	5	4.5%
Undergraduate	15	13.6%
Graduate	78	70.9%
Doctoral	12	10.9%
Career
Student	15	13.6%
Education	6	5.5%
Government institution	18	16.4%
Enterprise	64	58.2%
Other	7	6.4%

Purchase intention

We used a t-test to test H1. The findings revealed a statistically significant difference between the mid-event and post-event scenarios. Participants in the middle-of-event condition ([M  5.05, SD  1.13; t (108)  2.922, p  0.004]) had stronger prepaid purchase intentions than those in the post-event condition (, SD  1.00).

Psychological contracts

We used Correia et al.’s (2021) PROCESS macro (model 4; guide to bias correction  5000) for intermediate investigations to investigate the significance of psychological contracts. According to the findings, psychological contracts are adjusted for the impact of CSR contribution time on prepaid purchase intentions (indirect effect  0.3740, standard error  0.1455, 95 percent confidence interval [CI]  [0.6745, 0.0952]). When psychological contracts are considered, the duration of CSR contributions has a significant impact on prepaid purchase intent (indirect impact  0.3017, SE  0.1426, 95 percent CI  [0.5898, 0.0244]). As a result, psychological contracts, to some extent, aid in promoting this relationship. Overall, survey 1 finds that the timing of CSR donations influences customers’ willingness to make prepaid purchases. Due to donations made during the peak of the COVID-19 epidemic, consumers made prepaid purchases. Furthermore, psychological contracts have been discovered to govern this impact. In study 2, we investigated whether the effects of psychological contracts affect the amount of time spent on CSR and the likelihood of customers purchasing prepaid cards.

Results of corporate social responsibility donations

According to survey 1, customers’ prepaid purchase intent is significantly influenced by the time provided by CSR, with psychological contracts acting as mediators. Corporate social responsibility donations increased prepaid purchasing intentions during the COVID-19 epidemic (and beyond). To some extent, psychological contracts influence the impact of CSR contribution time on customers’ prepaid purchase intentions by amplifying the primary effect of CSR contribution time on consumers’ prepaid purchase intentions. The first study did not account for the potential moderating effects of psychological influences on purchases. As previously stated, the psychological contract might alter customers’ perceptions of COVID-19’s hazards. Different COVID-19 risk regions (risk centers and risk-free centers) may influence a customer’s prepaid purchase intention. The goal of study 2 was to replicate the findings of study 1 in different consumption settings and, more importantly, to investigate the impact of reducing the distance between the consumer and the pandemic’s epicenter. According to research on the effects of psychological contracts, the true danger does not always correspond to the perceived risk. People in the risk center may be perceived to be at a lower risk than those who are not (Bach et al., 2021, Singh et al., 2021). Customers in COVID-19 risk zones experienced the pandemic more severely than customers in risk areas due to the pandemic’s visual and psychological effects (i.e., the perceived danger imbalance between risk and non-risk locations). Hotel companies that participate in CSR activities in areas with high consumer risk awareness (risk centers other than COVID-19) may lose more customers than hotel companies that participate in CSR activities in areas with low consumer risk awareness, a favorable impression of high quality, and a low-risk future (e.g., COVID-19 risk center). As a result, consumers will be more eager to make a purchase. Thus, the involvement of corporate social responsibility during the COVID-19 outbreak (and beyond) increases customer desire for prepaid purchases in low-risk but dangerous locations.

A total of 310 people took part in this trial. The experiment had the following design: 2 (CSR contribution time: during and after the event) × 2 (CSR contribution time: during and after the event) × 2 (CSR contribution time: during and after the event) × 2 (distance from the risk center: COVID-19 risk center and non-COVID-19 risk center). At random, participants were assigned to one of four conditions. Beijing has become the epicenter of COVID-19 in China after becoming the focus of a second wave of the COVID-19 pandemic during the data collection procedure. As a result, the Beijing epidemic affected the experimental material in study 2. Participants from Beijing were sought for the risk-free center status, while those from cities south of Guangzhou were sought for the risk-free center status. Participants later discovered that, despite the restaurant’s difficult working conditions, they were active participants in COVID-19 corporate social responsibility programs. Participants learned during the session that during the COVID-19 epidemic in Beijing, the Beijing catering industry gave medical workers a CNY 500 fast food coupon once the pandemic was under control.

After carefully reading the materials, all participants responded to the three questions below, expressing a desire to obtain a prepaid restaurant card. Can I get a specific prepaid card because I frequently eat out? (3) “Would you recommend the specific prepaid card to friends who frequently dine out?” All questions were scored from 1 to 7, with 7 being the highest ( 0.802) (1 indicates a significant difference, and 7 indicates excellent agreement). Then, each participant filled out a psychological contract based on the following criteria: (1) “The Four Seasons Restaurant’s products and services are safe and dependable”, (2) “The Four Seasons Restaurant can give a long-term quality guarantee for my purchase”, (3) “The restaurant cares not only about my purchasing experience, but also about keeping a positive connection with me”. Similarly, all questions were graded on a 7-point scale from 1 to 7 (1 denotes a significant difference; 7 denotes significant agreement) ( 0.633). The participants were then asked to provide demographic information.

CSR contribution during COVID-19 period

Fig. 1 shows that the CSR contribution period (during and after the COVID-19 epidemic) and distance from risk centers (COVID-19 risk center and non-COVID-19 risk center) had no effect on consumers in a bidirectional ANOVA, especially the distance from the point of danger [F(1,306)  0.547, p  0.46] or goal [F(1,306)  0.106, p  0.745]. On the other hand, the bidirectional relationship between CSR contribution duration and distance from the risk center was significant ([F(1,306)  14.34, p , 2  0.045]). The table below shows that the restaurant’s CSR contribution (compared to post-peak) during COVID-19 incentivized non-COVID-19 risk center state participants to make a purchase ([M  5,43, SD  1.01 against M , SD  1.22; F(1,306)  8.206, p 0.05, 2  0.026]). CSR donations given during the epidemic (as opposed to after the outbreak peak) resulted in a stronger incentive to pre-order for COVID-19 risk center members ([M  4.84, F(1,306)  6.179, p 0.05, 2  0.02]; ET  1.25 against M , ET  1.22; F(1,306)  6.179, p 0.05, 2  0.02).

Fig. 1

CSR contribution period.

A moderate interim analysis was performed using the PROCESS macro (model 8; guide to bias correction  5000; Alles et al., 2021) to investigate the significance of psychological contracts. The 95 percent confidence interval for deviation correction [CI]  [1.1035, 0.4629] showed a significant indirect impact (b , SE  0.1616, 95 percent confidence interval for deviation correction [CI]  [1.1035, 0.4629]). CSR donations strengthened psychological commitments and increased the incentive to use prepaid cards during the epidemic (b , SE  0.1103, 95 percent CI with bias correction  [0.7213, 0.2884]). However, under the COVID-19 risk center conditions, CSR donations made after the outbreak’s peak resulted in stronger psychological contracts among participants and increased prepaid purchases (b , SE  0.1120). CI  [0.0590, 0.5035] (95 percentile adjustment). Finally, study 2 used a different stimulus to replicate the results of study 1 (for example, a restaurant). Furthermore, in study 2, distance from the COVID-19 risk center was found to be a mitigating factor (in contrast to the non-COVID-19 risk center). Despite the fact that the participants were in a non-COVID-19 risk center, corporate social responsibility donations made during the epidemic (rather than after the fact) were shown to motivate consumers to make a purchase in advance. Customers who lived in COVID-19 high-risk areas were in the opposite situation.

SMEs structural model assessment

The meaning of the root model connection was determined using bootstrapping in the first and second phases (5000 subsamples, skew correction, and accelerated bootstrap, two-tailed test). Table 5, Table 6 show the estimates for the first and second phases, respectively. The second phase investigated CSR because the presented hypothesis suggested that it was a secondary structure. However, the first phase survey results revealed five LOCs (CSR community, CSR employees, CSR). It also revealed some fascinating information about the human impact on the environment (CSR legacy and CSR products). As shown in Table 5, three of the five CSR components significantly influence co-creation (CSR community, CSR legacy, and CSR environment), while the other two (CSR workers and CSR goods) do not. The CSR community component has the most influence ( 0.225, p 0.01), followed by legacy ( 0.219, p 0.01) and the environment ( 0.173, p 0.05).

Table 5

CSR Model and COVID-19 effects estimates.

Covid-19 Effects	Path coefficients	t values	95% Confidence Intervals
SMEs strategies → CSR-Community	0.257	3.656⁎⁎⁎	[0.082, 0.371]
SMEs strategies → CSR-Employees	0.144	1.839⁎	[−0.026, 0.287]
SMEs strategies → CSR-Environment	0.198	2.879⁎⁎⁎	[0.050, 0.320]
SMEs strategies → CSR-Heritage	0.189	2.063⁎⁎	[0.027, 0.373]
SMEs strategies → CSR-Products	0.334	3.849⁎⁎⁎	[0.156, 0.49]
Reactive strategies → CSR-Community	0.149	2.204⁎⁎	[−0.003, 0.263]
Reactive strategies → CSR-Employees	0.146	1.962⁎⁎	[−0.020, 0.275]
Reactive strategies → CSR-Environment	0.148	2.118⁎⁎	[−0.008, 0.269]
Reactive strategies → CSR-Heritage	0.150	2.498⁎⁎	[0.007, 0.252]
Reactive strategies → CSR-Products	0.149	2.355⁎⁎	[0.002, 0.254]
1.CSR-Community → Co-creation	0.231	2.959⁎⁎⁎	[0.060, 0.364]
2. CSR-Employees → Co-creation	0.004	0.027	[−0.138, 0.135]
3.CSR-Environment → Co-creation	0.188	2.368⁎⁎	[0.020, 0.31]
4.CSR-Heritage → Co-creation	0.221	2.671⁎⁎⁎	[0.059, 0.384]
5.CSR-Products → Co-creation	0.061	0.698	[−0.121, 0.207]
Co-creation → Performance	0.391	5.254⁎⁎⁎	[0.229, 0.517]
SMEs strategies → Performance	−0.011	0.147	[−0.149, 0.133]
Reactive strategies → Performance	−0.253	3.662⁎⁎⁎	[−0.380, −0.111]

p < 0.01;

p < 0.05;

p < 0.01.

Table 6

CSR Model estimates – second stage.

Effects	Path coefficients	t values	95% Confidence Intervals
SMEs strategies → CSR	0.312***	3.663	[0.131, 0.466]
CSR → Co-creation	0.481***	7.555	[0.329, 0.586]
Co-creation → Performance	0.414***	5.594	[0.249, 0.546]
SMEs strategies → Performance	−0.015	0.209	[−0.169, 0.121]
Reactive strategies → CSR	0.197***	3.407	[0.061, 0.299]
Reactive strategies → Performance	−0.238***	3.536	[−0.363, −0.100]
Specific indirect effects
SMEs strategies → CSR → Co-creation	0.150***	2.890	[0.058, 0.252]
Reactive strategies → CSR → Co-creation	0.095***	3.022	[0.028, 0.153]
SMEs strategies → CSR → Co-creation → Performance	0.062***	2.632	[0.022, 0.110]
CSR → Co-creation → Performance	0.300***	5.033	[0.121, 0.274]
Reactive strategies → CSR → Co-creation → Performance	0.039***	2.709	[0.012, 0.069]
Total effect
Reactive strategies → Performance	−0.300***	2.860	[−0.329, −0.056]

The hypothesis was then tested using model estimation in the second stage. Before studying structural linkages, we checked for collinearity using the expansion factor of variance (VIF) values. All of the VIF measurements were significantly lower than the 5-point limit (the maximum allowed value is 1223). The bootstrap approach was then used to determine the significance and relevance of the structural model relationship. Table 6 summarizes the survey findings. The findings demonstrate that SME strategies are associated with corporate social responsibility ( 0.312, p ), co-creation ( 0.481, p ), and, as a result, performance ( 0.414, p ). In general, SME strategies have a substantial and positive indirect effect on performance ( 0.062, p ) but no direct effect ( 0.015, p> 0.10). Hypothesis 1 is thus validated, implying that (keyword 2) positively impacts SMEs’ performance, which is entirely governed by corporate social responsibility and co-creation. Furthermore, the reactive strategy had both a direct ( 0.238, p 0.01) and an indirect (via CSR and co-creation) negative impact on performance ( 0.039, p 0.01). Thus far, H2a and H2b have been accepted. Reactive approaches have a cumulative negative effect on performance as well ( 0.300, p ). Finally, no control factors were discovered that had a statistically significant influence on the outcomes.

Furthermore, the R2 coefficient of determination of the performance of the target construction was relatively low (0.226). The Q2 performance requirement predictive correlation was then evaluated using a blind technique with a missing distance of 7 points. The study produced Q2 values greater than zero (0.150). This demonstrates that the model could predict the outcome with statistical significance (Adhikary et al., 2021). Furthermore, PLS prediction with 10 iterations and 10 iterations was used to assess out-of-sample predictive ability. For all indicators of the target structure, Q2 was greater than zero, and the prediction error obtained by the PLS-SEM analysis (in terms of square root error) was less than the linear model’s reference point. As a result, the model was shown to be remarkably accurate (Chatterjee et al., 2021).

Discussion

Tourism businesses are implementing various technologies to address the severe economic impact of COVID-19 (keyword 3). This study adds to our understanding of how these measures might improve company performance by focusing on the regulatory implications of corporate social responsibility in the context of the SME industry. As a result, the study’s findings suggest that both active and passive strategies improve performance only if farms’ CSR behavior toward communities, employees, the environment, history, and goods is first changed, showcasing their ability to impart knowledge. These results show how well-tuned the active response technology (Adhikary et al., 2021) and the system resilience are (Nartey and van der Poll, 2021). Although SME strategies do not directly benefit the community, they are the first to contribute to the resilience of the local SME business system through CSR efforts to conserve and improve the resources necessary for co-creating tourism experiences (Chatterjee et al., 2021).

Furthermore, the findings show that even reactive strategies can encourage corporate social responsibility behaviors, making it easier to co-create tourism experiences and improve SMEs’ business performance. Reactive technology, on the other hand, has a negative impact on overall performance. The negative direct impact outweighs the positive indirect influence.

These findings on CSR and the applicability of system resilience also contribute to ongoing discussions about COVID-19’s long-term impact on tourism’s future growth. Many studies have emphasized the importance of rethinking the tourist industry’s growth trajectory and broadening the adoption of corporate social responsibility measures such as food production and environmental protection for the industry’s long-term success (Sathana et al., 2021). This study’s findings support this argument at the corporate level, demonstrating that SME businesses can improve their success by implementing CSR practices to address climate change. They also suggest that similar measures be implemented throughout the agricultural sector. This study investigated, for the first time, the importance of all dimensions of CSR (community, employees, environment, wealth, and raw materials) in controlling the relationship between crisis management strategies and corporate performance.

The empirical research presented in this study focuses on SMEs. The effect of the surrounding environment makes SMEs firms better equipped than other types of tourism activities crisis to select and implement dynamic behaviors to adapt to current conditions (Almagrabi et al., 2021). Furthermore, Alles et al. (2021) found some evidence that local tourist enterprises are more resilient to the current pandemic. According to a new study, farmhouses will be popular in 2020 because of the limited number of people who can stay at the same time and their reasonable size, which provides tourists with a sense of “security” (Raza et al., 2021). According to this study, the high level of resilience of SME firms is due not only to their distinct origin (for example, the significant availability of land to facilitate social distancing), but also to their social capital (Chatterjee et al., 2021). By maintaining and expanding relationships with key stakeholders, SMEs can adapt by gathering the resources needed to efficiently co-create the visitor experience. It appears natural to believe that SME firms have more social capital due to their inherent close relationship with socio-cultural and environmental factors. On the other hand, social capital is a valuable resource that helps SMEs to succeed (Heider et al., 2021). Finally, this study is based on a CSR conceptualization that includes all components (community, employees, environment, history, and goods), allowing for a thorough examination of the influence of each factor. According to previous work, the strength of each component of CSR varies depending on the nature, length, and location of the travel activity, and may also “develop and vary over time during the pandemic”. Corporate social responsibility elements related to the community, the environment, and history were especially important for farms in the early months of the pandemic, as were corporate social responsibility aspects related to employees. Given the small number of people employed by these tourism businesses, this conclusion appears logical.

Furthermore, the survey’s findings provide specific guidance to agriculture and tourism businesses on how to address the current negative consequences of the crisis. Firstly, active technology must be chosen over passive technology. However, farm business owners should keep in mind that SME strategies have no direct impact on the business’s success. They need to first contribute to a company’s CSR behavior to influence its profitability positively. This strategy should prioritize community involvement, environmental management, and CSR initiatives that enhance the historical significance of the local area. Despite the significant challenges that COVID-19 presents, SMEs must continue to generate social capital by contributing to the well-being of their communities and preserving local values and heritage. It is critical, for example, to buy local products and services and to participate in projects that benefit the local economy. Similarly to other tourism businesses, SMEs can employ passive strategies such as cost cuts, service disruptions, and project cancellations. Entrepreneurs in the SME industry should be aware that reactive strategies may have a negative impact on overall success. However, as the study’s findings show, the direct negative impact of these techniques can be mitigated by redirecting extra resources to SMEs’ core beliefs and activities, and by using materials that are specifically related to communities, the environment, and heritage. CSR is thus extremely beneficial.

Conclusions and policy implications

The COVID-19 pandemic has posed unprecedented challenges to tourism businesses, jeopardizing their viability. This study bridges the gap by comparing the notion of system resilience with active and passive responses to corporate social responsibility. As a result, SME strategies have been found to positively influence company performance only when corporate social responsibility behavior improves, and a system of resilience that can successfully co-create a trip experience is implemented. A posteriori measurement, for example, has a variety of implications. By encouraging corporate social responsibility activities, SMEs can either directly or indirectly reduce the company’s performance. Our findings emphasize the importance of a critical intermediary in corporate social responsibility by connecting business strategy and performance.

This study focuses on the corporate social responsibility of communities, workers, the environment, and the legacy of responsibility. According to the survey, the most essential aspects of CSR for local tourist enterprises are those relating to the community, the environment, and history. The findings are not yet applicable to other countries or the tourism industry. Future research needs to look into the proportional link between the framework’s universality for other tourist businesses (such as hotels and tour operators) and the influence of active and passive activities on the five CSR criteria. Future research could also assess the generalizability of the findings by re-creating the study in various scenarios. According to national legislation, the agricultural and SME sectors in Vietnam are inextricably linked. In some countries, SME farms are not required to be located on a farm; however, some farmers exclusively provide hospitality in an agricultural setting. As a result, it is suggested that the survey be repeated in different settings to determine the generalizability of the survey results and the role of various components of CSR activity.

Another limitation of the study is its inability to measure a company’s success. Self-reported performance metrics are frequently used in tourist business surveys and are especially useful for micro-businesses such as SMEs. On the other hand, the addition of objective performance measures would increase the external validity of the results. Finally, the COVID-19 pandemic is still ongoing at the time of the study and has no foreseen end date. The effectiveness of these tactics and additional assessments will be required to determine the long-term outcomes of these actions.