The Effect of Environmental, Social and Governance Risks

Tarik Dogru; Erdinç Akyildirim; Oguzhan Cepni; Ozgur Ozdemir; Abhinav Sharma; Muhammed Hasan Yılmaz

doi:10.1016/j.annals.2022.103432

The Effect of Environmental, Social and Governance Risks

Tarik Dogru^*, Erdinç Akyildirim, Oguzhan Cepni, Ozgur Ozdemir, Abhinav Sharma, Muhammed Hasan Yılmaz

^*Corresponding author af dette arbejde

Økonomisk Institut

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › peer review

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.

Originalsprog	Engelsk
Artikelnummer	103432
Tidsskrift	Annals of Tourism Research
Vol/bind	95
Antal sider	15
ISSN	0160-7383
DOI	https://doi.org/10.1016/j.annals.2022.103432
Status	Udgivet - jul. 2022

Emneord

Event study methodology
Environmental
Social
Governance
Firm value
COVID-19 pandemic

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title = "The Effect of Environmental, Social and Governance Risks",

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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author = "Tarik Dogru and Erdin{\c c} Akyildirim and Oguzhan Cepni and Ozgur Ozdemir and Abhinav Sharma and Yılmaz, {Muhammed Hasan}",

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T1 - The Effect of Environmental, Social and Governance Risks

AU - Dogru, Tarik

AU - Akyildirim, Erdinç

AU - Cepni, Oguzhan

AU - Ozdemir, Ozgur

AU - Sharma, Abhinav

AU - Yılmaz, Muhammed Hasan

PY - 2022/7

Y1 - 2022/7

N2 - 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.

AB - 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.

KW - Event study methodology

KW - Environmental

KW - Social

KW - Governance

KW - Firm value

KW - COVID-19 pandemic

KW - Event study methodology

KW - Environmental

KW - Social

KW - Governance

KW - Firm value

KW - COVID-19 pandemic

U2 - 10.1016/j.annals.2022.103432

DO - 10.1016/j.annals.2022.103432

M3 - Journal article

SN - 0160-7383

VL - 95

JO - Annals of Tourism Research

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M1 - 103432

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