Sustainability engagement’s impact on tourism sector performance: linear and nonlinear models
Journal of Organizational Change Management
ISSN: 0953-4814
Article publication date: 1 March 2021
Issue publication date: 25 March 2022
Abstract
Purpose
This study aims to investigate the relationship between the level of sustainability reporting and tourism sector’s performance (operational, financial and market).
Design/methodology/approach
Using data culled from 1,375 observations from 37 different countries for ten years (2008–2017), an independent variable derived from the environmental, social and governance (ESG score) is regressed against dependent performance indicator variables (return on assets (ROA), return on equity (ROE) and Tobin's Q (TQ)). Two types of control variables complete the regression analysis in this study: firm-specific and macroeconomic.
Findings
The findings elicited from the empirical results of the linear models demonstrate that there is a significant relationship between ESG and operational performance (ROA) and market performance (TQ). However, there is no significant relationship between ESG and financial performance (ROE). Furthermore, the results of the nonlinear models suggest that the relationship between sustainability performance and firm's profitability and valuation is nonlinear (inverted U-shape).
Originality/value
The models in this study presents a valuable analytical framework for exploring sustainability reporting as a driver of performance in the tourism sector's economies. In addition, this study highlights the tourism sector's management lacunae manifesting in terms of the weak nexus between each component of ESG and tourism sector's performance.
Keywords
Citation
Buallay, A., Al-Ajmi, J. and Barone, E. (2022), "Sustainability engagement’s impact on tourism sector performance: linear and nonlinear models", Journal of Organizational Change Management, Vol. 35 No. 2, pp. 361-384. https://doi.org/10.1108/JOCM-10-2020-0308
Publisher
:Emerald Publishing Limited
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