Tourist destination competitiveness and ESG performance in the airline industry
-
DOIhttp://dx.doi.org/10.21511/ppm.20(4).2022.12
-
Article InfoVolume 20 2022, Issue #4, pp. 153-165
- 700 Views
-
92 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The relevance of corporate environmental, social, and governance performance (ESG) has increased significantly during the last few years. The airline industry is susceptible to such environmental, social, and governance practices, which explains its selection for the analysis purposes in this study. This paper analyzes the influence of the Travel & Tourism Competitiveness Index and its constituent factors on environmental, social, and governance performance variables in a sample of leading airline companies worldwide with historical data available from 2013 to 2019. The study required analyzing panel data using a panel-corrected standard error model. The results suggest that airlines headquartered in countries with ideal conditions for operating businesses and outstanding information and communication technology readiness show excellent environmental, social, and governance performance. However, the findings also imply that airline companies headquartered in countries with heavy government influence on the airline industry sector measured by the government prioritization of the domestic travel and tourism sector have poor environmental, social, and governance performance. Similarly, the analysis provided evidence that countries well positioned to join national air service arrangements and subscribe to regional trade agreements have airline companies with excellent environmental, social, and governance performance metrics. The reported results can be priceless for policymakers designing national travel and tourism policies to enhance domestic airline firms’ environmental, social, and governance performance.
- Keywords
-
JEL Classification (Paper profile tab)Q56, Q58, L84, Z32, R49
-
References42
-
Tables3
-
Figures0
-
- Table 1. Summary statistics
- Table 2. Panel corrected standard errors (PCSE) results for ESG’s Pillars versus TTCI’ Sub-indexes
- Table 3. Panel corrected standard errors (PCSE) results for ESG’s Pillars versus TTCI’ Pillars
-
- Bae, K.H., El Ghoul, S., Gong, Z., & Guedhami, O. (2021). Does CSR matter in times of crisis? Evidence from the COVID-19 pandemic. Journal of Corporate Finance, 67, 101876.
- Baker, E. D., Boulton, T. J., Braga-Alves, M. V., & Morey, M. R. (2021). ESG government risk and international IPO underpricing. Journal of Corporate Finance, 67, 101913.
- Beck, N., & Katz, J. N. (1995). What to do (and not to do) with time series cross-section data. American Political Science Review, 89(3), 634-647.
- Bertrand, O., Betschinger, M.-A., & Moschieri, C. (2021). Are firms with foreign CEOs better citizens? A study of the impact of CEO foreignness on corporate social performance. Journal of International Business Studies, 52(3), 525-543.
- Brammer, S., Brooks, C., & Pavelin, S. (2006). Corporate social performance and stock returns: UK evidence from disaggregate measures. Financial Management, 35(3), 97-116.
- Broadstock, D., Chan, K., Cheng, L., & Wang, X. (2021). The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China. Finance Research Letters, 38, 101716.
- Byers, J. (2021, April 13). Canadian Taxpayers Now Own Part of Air Canada. Travel Pulse Canada.
- Capelle-Blancard, G., & Petit, A. (2019). Every Little Helps? ESG News and Stock Market Reaction. Journal of Business Ethics, 157(2), 543-565.
- Chen, L., Yuan, T., Cebula, R. J., Shuangjin, W., & Foley, M. (2021). Fulfillment of ESG Responsibilities and Firm Performance: A Zero-Sum Game or Mutually Beneficial. Sustainability, 13(19), 10954.
- Chen, S., Chen, M., & Wei, H. (2017). Financial performance of Chinese airlines: Does state ownership matter? Journal of Hospitality and Tourism Management, 33(1), 1-10.
- Duque-Grisales, G., & Aguilera-Caracuel, J. (2021). Environmental, Social and Governance (ESG) Scores and Financial Performance of Multilatinas: Moderating Effects of Geographic International Diversification and Financial Slack. Journal of Business Ethics, 168(2), 315-334.
- Ferreira, F., & Castro, C. (2020). Competitiveness of European Tourism: A Cluster Analysis. Proceedings of the 3rd International Conference on Tourism Research. Universidad Europea de Valencia, Spain.
- Flammer, C. (2013). Corporate Social Responsibility and Shareholder Reaction: The Environmental Awareness of Investors. Academy of Management Journal, 56(3), 758-781.
- Hu, Y. Y., Zhu, Y., Tucker, J., & Hu, Y. (2018). Ownership influence and CSR disclosure in China. Accounting Research Journal, 31(1), 8-21.
- Ionescu, G. H., Firoiu, D., Pirvu, R., & Vilag, R. D. (2019). The impact of ESG factors on market value of companies from travel and tourism industry. Technological and Economic Development of Economy, 25(5), 820-849.
- Javed, M., & Tučková, Z. (2019). Competitiveness in Tourism: A Comparative Analysis of Selected South-Asian Countries. 2nd International Conference on Tourism Research (pp. 381-388).
- Jia, Y., Gao, X., & Julian, S. (2020). Do firms use corporate social responsibility to insure against stock price risk? Evidence from a natural experiment. Strategic Management Journal, 41(2), 290-307.
- Kao, E., Yeh, C., Wang, L., & Fung, H. (2018). The relationship between CSR and performance: Evidence in China. Pacific-Basin Finance Journal, 51(1), 155-170.
- Kayar, C., & Kozak, N. (2010). Measuring Destination Competitiveness: An Application of the Travel and Tourism Competitiveness Index (2007). Journal of Hospitality Marketing & Management, 19(1), 203-216.
- Klassen, R. D., & McLaughlin, C. P. (1996). The impact of environmental management on firm performance. Management Science, 42(8), 1199-1214.
- Koh, P.-S., Qian, C., & Wang, H. (2014). Firm litigation risk and the insurance value of corporate social performance. Strategic Management Journal, 35(10), 1464-1482.
- Koutoupis, A., Kyriakogkonas, P., Pazarskis, M., & Davidopoulos, L. (2021). Corporate governance and COVID-19: a literature review. Corporate Governance, 21(6), 969-982.
- Kuo, T-C., Chen, H-S., & Meng, H-M. (2021). Do corporate social responsibility practices improve financial performance? A case study of airline companies. Journal of Cleaner Production, 310, 127380.
- Lee, M. T., Raschke, R. L., & Krishen, A. S. (2022). Signaling green! firm ESG signals in an interconnected environment that promote brand valuation. Journal of Business Research, 138, 1-11.
- Martins, H. C. (2022). Competition and ESG practices in emerging markets: Evidence from a difference-in-differences model. Finance Research Letters, 46, 102371.
- Mukanjari, S., & Sterner, T. (2020). Charting a ‘Green Path’ for Recovery from COVID-19. Environmental & Resource Economics, 76(4), 825-853.
- Nazmfar, H., Eshghei, A., Alavi, S., & Pourmoradian, S. (2019). Analysis of travel and tourism competitiveness index in middle-east countries. Asia Pacific Journal of Tourism Research, 24(6), 501-513.
- Park, E. (2019). Corporate social responsibility as a determinant of corporate reputation in the airline industry. Journal of Retailing and Consumer Services, 47(1), 215-221.
- Petrova, M., Dekhtyar, N., Klok, O., & Loseva, O. (2018). Regional tourism infrastructure development in the state strategies. Problems and Perspectives in Management, 16(4), 259-274.
- Popescu, D., Oehler-Şincai, I., Bulin, D., & Tănase, I. (2018). CEE-16: A Cluster Analysis Based on Tourism Competitiveness and Correlations with Major Determinants. Amfiteatru Economic, 20(12), 833-853.
- Posaner, J. (2020). Brussels and Berlin reach deal on Lufthansa bailout. POLITICO.
- Reverte, C. (2009). Determinants of Corporate Social Responsibility Disclosure Ratings by Spanish Listed Firms. Journal of Business Ethics, 88(1), 351-366.
- Salinas Fernández, J. A., Azevedo, P., Martín Martín, J., & Rodríguez Martín, J. A. (2020). Determinants of tourism destination competitiveness in the countries most visited by international tourists: Proposal of a synthetic index. Tourism Management Perspectives, 33, 100582.
- Schaltegger, S., & Hörisch, J. (2017). In Search of the Dominant Rationale in Sustainability Management: Legitimacy- or Profit-Seeking? Journal of Business Ethics, 145(2), 259-276.
- Shiu, Y.-M., & Yang, S.-L. (2017). Does engagement in corporate social responsibility provide strategic insurance-like effects? Strategic Management Journal, 38(2), 455-470.
- Singhania, M., & Saini, N. (2021). Institutional framework of ESG disclosures: comparative analysis of developed and developing countries. Journal of Sustainable Finance & Investment.
- Terzić, L. (2018). How Tourism Destination Competitiveness Contributes To GDP Growth – The Case Of Selected European Economies. Acta Oeconomica Pragensia, 26(3), 24-34.
- Vo, T. T., Xiao, X., & Ho, S.Y. (2019). How Does Corporate Social Responsibility Engagement Influence Word of Mouth on Twitter? Evidence from the Airline Industry. Journal of Business Ethics, 157(2), 525-542.
- Vural-Yavaş, Ç. (2021). Economic policy uncertainty, stakeholder engagement, and environmental, social, and governance practices: The moderating effect of competition. Corporate Social-Responsibility and Environmental Management, 28(1), 82-102.
- Webster, C., & Ivanov, S. (2014). Transforming competitiveness into economic benefits: Does tourism stimulate economic growth in more competitive destinations? Tourism Management, 40(1), 137-140.
- Weston, P., & Nnadi, M. (2021). Evaluation of strategic and financial variables of corporate sustainability and ESG policies on corporate finance performance. Journal of Sustainable Finance and Investment.
- World Economic Forum. (2019). The Travel & Tourism Competitiveness Report 2019.