Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry
In this study, we examine the extent to which the implementation of environmental, social, and governance (ESG) disclosures influence the firm value and financial performance of airlines. The panel data analysis is applied to the set of collected data from the Thomson Reuters Eikon database for the...
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doaj-0e3db949b8324f1ba7224ccd875b57422020-11-29T00:02:16ZengMDPI AGSustainability2071-10502020-11-01129957995710.3390/su12239957Impact of Sustainability on Firm Value and Financial Performance in the Air Transport IndustryYaghoub Abdi0Xiaoni Li1Xavier Càmara-Turull2Department of Business management, Faculty of Business and Economics, Universitat Rovira i Virgili, 43204 Reus, Tarragona, SpainDepartment of Business management, Faculty of Business and Economics, Universitat Rovira i Virgili, 43204 Reus, Tarragona, SpainDepartment of Business management, Faculty of Business and Economics, Universitat Rovira i Virgili, 43204 Reus, Tarragona, SpainIn this study, we examine the extent to which the implementation of environmental, social, and governance (ESG) disclosures influence the firm value and financial performance of airlines. The panel data analysis is applied to the set of collected data from the Thomson Reuters Eikon database for the sample of 27 airlines worldwide from 2013 to 2019. Findings of this study support the positive relationship between the environmental pillar score (Env) and governance pillar score (Gov), with market-to-book ratio and Tobin’s Q as proxies for firm value and financial performance, respectively. This finding implies that an increase in both pillars leads to higher market value and financial efficiency for investigated airlines. Therefore, an airline’s effort to improve Env and Gov dimensions will lead to higher market value and return on invested funds. In contrast, the social pillar disclosure in both models is found to have a significant negative association with the dependent variables, showing that airlines’ social activities result in lower value as well as level of performance.https://www.mdpi.com/2071-1050/12/23/9957sustainabilityfirm valuefinancial performanceair transport industryenvironmental, social and governance (ESG)market-to-book ratio |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Yaghoub Abdi Xiaoni Li Xavier Càmara-Turull |
spellingShingle |
Yaghoub Abdi Xiaoni Li Xavier Càmara-Turull Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry Sustainability sustainability firm value financial performance air transport industry environmental, social and governance (ESG) market-to-book ratio |
author_facet |
Yaghoub Abdi Xiaoni Li Xavier Càmara-Turull |
author_sort |
Yaghoub Abdi |
title |
Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry |
title_short |
Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry |
title_full |
Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry |
title_fullStr |
Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry |
title_full_unstemmed |
Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry |
title_sort |
impact of sustainability on firm value and financial performance in the air transport industry |
publisher |
MDPI AG |
series |
Sustainability |
issn |
2071-1050 |
publishDate |
2020-11-01 |
description |
In this study, we examine the extent to which the implementation of environmental, social, and governance (ESG) disclosures influence the firm value and financial performance of airlines. The panel data analysis is applied to the set of collected data from the Thomson Reuters Eikon database for the sample of 27 airlines worldwide from 2013 to 2019. Findings of this study support the positive relationship between the environmental pillar score (Env) and governance pillar score (Gov), with market-to-book ratio and Tobin’s Q as proxies for firm value and financial performance, respectively. This finding implies that an increase in both pillars leads to higher market value and financial efficiency for investigated airlines. Therefore, an airline’s effort to improve Env and Gov dimensions will lead to higher market value and return on invested funds. In contrast, the social pillar disclosure in both models is found to have a significant negative association with the dependent variables, showing that airlines’ social activities result in lower value as well as level of performance. |
topic |
sustainability firm value financial performance air transport industry environmental, social and governance (ESG) market-to-book ratio |
url |
https://www.mdpi.com/2071-1050/12/23/9957 |
work_keys_str_mv |
AT yaghoubabdi impactofsustainabilityonfirmvalueandfinancialperformanceintheairtransportindustry AT xiaonili impactofsustainabilityonfirmvalueandfinancialperformanceintheairtransportindustry AT xaviercamaraturull impactofsustainabilityonfirmvalueandfinancialperformanceintheairtransportindustry |
_version_ |
1724412880103669760 |