Authors: Nikolaos Tsileponis, Omneya Abdelsalam, Antonios Chantziaras, Vassiliki Grougiou, Stergios Leventis

Title: Sustainability Performance and Corporate Risk-Taking: Evidence from the Tourism Services Industry

Abstract

We investigate the impact of corporate sustainability performance (CSP) on corporate risk-taking (CRT). We employ the tenets of stakeholder theory and the resource-based view and an international sample of 274 tourism firms for the period 2002-2018. We demonstrate a negative association between CSP and CRT, which is more pronounced when investment companies and advisors and pension funds act as controlling shareholders. Our analyses reveal that tourism firms with better CSP have significantly less risk of volatile earnings (by around 2.25%) and a lower probability of failure (by around 25%), as proxies of corporate risk-taking, compared to their counterparts with poor CSP. Our findings are robust to endogeneity and model misspecification. Overall, we add new evidence suggesting that CSP generates value and concrete positive outcomes for tourism firms, an effect that is moderated based on the identity of controlling shareholders.