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

Title: The Impact of Corporate Sustainability Performance on Corporate Risk-Taking: Evidence from the Tourism Industry

Abstract

We investigate the impact of corporate sustainability performance (CSP) on corporate risk-taking (CRT). Employing an international sample of 274 tourism firms for the period 2002-2018, we demonstrate a negative association between CSP and CRT. We show that the negative effect of CSP on firms’ CRT is more pronounced when investment companies and advisors and pension funds act as controlling shareholders. We also reveal that tourism firms with better sustainability performance have significantly less (around 25%) risk to fail when compared to their poor sustainability performing counterparts. Our findings are robust to endogeneity and model misspecification. Overall, we add new evidence to a growing literature suggesting that improved CSP generates concrete positive corporate outcomes.