The effect of environmental, social and governance risks

Tarik Dogru; Erdinc Akyildirim; Oguzhan Cepni; Ozgur Ozdemir; Abhinav Sharma; Muhammed Hasan Yilmaz

doi:10.1016/j.annals.2022.103432

The effect of environmental, social and governance risks

Tarik Dogru^*, Erdinc Akyildirim, Oguzhan Cepni, Ozgur Ozdemir, Abhinav Sharma, Muhammed Hasan Yilmaz

^*Corresponding author for this work

Research output: Contribution to journal › Article › 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.

Original language	English
Article number	103432
Number of pages	15
Journal	Annals of Tourism Research
Volume	95
Early online date	13 Jun 2022
DOIs	https://doi.org/10.1016/j.annals.2022.103432
Publication status	Published - 1 Jul 2022

Keywords

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

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10.1016/j.annals.2022.103432

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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.",

keywords = "COVID-19 pandemic, Environmental, Event study methodology, Firm value, Governance, Social",

author = "Tarik Dogru and Erdinc Akyildirim and Oguzhan Cepni and Ozgur Ozdemir and Abhinav Sharma and Yilmaz, {Muhammed Hasan}",

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T1 - The effect of environmental, social and governance risks

AU - Dogru, Tarik

AU - Akyildirim, Erdinc

AU - Cepni, Oguzhan

AU - Ozdemir, Ozgur

AU - Sharma, Abhinav

AU - Yilmaz, Muhammed Hasan

PY - 2022/7/1

Y1 - 2022/7/1

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 - COVID-19 pandemic

KW - Environmental

KW - Event study methodology

KW - Firm value

KW - Governance

KW - Social

U2 - 10.1016/j.annals.2022.103432

DO - 10.1016/j.annals.2022.103432

M3 - Article

SN - 0160-7383

VL - 95

JO - Annals of Tourism Research

JF - Annals of Tourism Research

M1 - 103432

ER -

The effect of environmental, social and governance risks

Abstract

Keywords

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