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Internal and external effects of quality on competitiveness: Applications for the hotel sector in Spain

Juan Campos-Soria () and Ricardo Pagan Rodriguez ()

ERSA conference papers from European Regional Science Association

Abstract: The aim of this paper is to analyze — from a global perspective — the main relationships existing between service quality and businesses competitiveness. To this end, a simultaneous equations model is presented. This model enables distinguishing between the external and internal effects of quality on competitiveness, and empirically verifies a set of hypotheses of great significance for the hotel industry. The data used to empirically verify this model were gathered from hotels owned by a national hotel company in Spain. The client survey carried out by the hotel — in the form of questionnaires — was the basis for creating the service quality indicators and establishing their most relevant dimensions. The quality indicator was created for each hotel based using Structural Equation Modelling (S.E.M.). On the other hand, the economic and financial data pertaining to the hotels served to create competitiveness indicators for each of them. The sign and value of the coefficients estimated by the model presented lead to a series of conclusions regarding the complex sequence of direct and indirect causal relationships between quality and competitiveness. The estimation obtained was used to empirically verify a set of key hypotheses regarding the competitiveness of these hotels and to propose measures designed to improve it.

Date: 2003-08
New Economics Papers: this item is included in nep-com and nep-geo
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