Exploring the impact of sustainability (ESG) disclosure on firm value and financial performance (FP) in airline industry: the moderating role of size and age

Yaghoub Abdi (), Xiaoni Li () and Xavier Càmara-Turull ()
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Yaghoub Abdi: Universitat Rovira i Virgili
Xiaoni Li: Universitat Rovira i Virgili
Xavier Càmara-Turull: Universitat Rovira i Virgili

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2022, vol. 24, issue 4, No 25, 5052-5079

Abstract: Abstract This study aims at exploring the impact of ESG scores on the value and FP of firms in the airline industry. The potential moderating role of firm size and age has also been studied in an effort to disentangle their relationships in this context. In particular, the analysis involves interaction effects for two types of firms: full-service and low-cost carriers. Based on the collected data from 38 airlines worldwide for the period 2009 to 2019, we observed that contributions to governance initiatives improve a firm’s market-to-book ratio. We also found that a firm’s participation in social and environmental activities is positively and significantly rewarded by a higher level of financial efficiency. Additionally, firm size is the relevant moderator for the association between sustainability disclosure and both firm value and FP in the air transport industry. We therefore propose that a managerial strategy of participating in these initiatives may adapt them based on their total assets as proxy of firm size. In regard to firm age, we did not find it to be a significant moderator.

Keywords: Sustainability; Firm value; Financial performance; Airline industry; Firm age; Firm size (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (38)

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DOI: 10.1007/s10668-021-01649-w

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