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The effect of environmental, social and governance risks


Dogru, Tarik; Akyildirim, Erdinc; Cepni, Oguzhan; Ozdemir, Ozgur; Sharma, Abhinav; Yilmaz, Muhammed Hasan (2022). The effect of environmental, social and governance risks. Annals of Tourism Research, 95:103432.

Abstract

This study examines the effect of environmental, social and governance risks on firm value. We analyze the extent to which environmental, social and governance related news affect tourism firms' abnormal returns using event study methodology. The results show that environmental, social and governance related news releases do not significantly affect firm value in the short-term. We further investigate the effect of environmental, social and governance risks on the value of tourism firms during the recent pandemic utilizing difference-in-differences analysis. The results provide robust evidence that sustainable business practices provide higher resilience to pandemic-like external shocks. Also, the presence of a sustainability committee mitigates the adverse effects of environmental, social and governance risks on firm value. Theoretical and practical implications are discussed.

Abstract

This study examines the effect of environmental, social and governance risks on firm value. We analyze the extent to which environmental, social and governance related news affect tourism firms' abnormal returns using event study methodology. The results show that environmental, social and governance related news releases do not significantly affect firm value in the short-term. We further investigate the effect of environmental, social and governance risks on the value of tourism firms during the recent pandemic utilizing difference-in-differences analysis. The results provide robust evidence that sustainable business practices provide higher resilience to pandemic-like external shocks. Also, the presence of a sustainability committee mitigates the adverse effects of environmental, social and governance risks on firm value. Theoretical and practical implications are discussed.

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19 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Development
Social Sciences & Humanities > Tourism, Leisure and Hospitality Management
Scope:Discipline-based scholarship (basic research)
Language:English
Date:July 2022
Deposited On:30 Dec 2022 06:20
Last Modified:28 Apr 2024 01:41
Publisher:Elsevier
ISSN:0160-7383
OA Status:Closed
Publisher DOI:https://doi.org/10.1016/j.annals.2022.103432
Official URL:https://doi.org/10.1016/j.annals.2022.103432
Other Identification Number:merlin-id:23035
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