Exploring the Financial Perspective in Sustainability Strategies: The Case of the Tourism Industry

This study examines the relationship between sustainability and corporate financial performance in the tourism sector. To address the mixed and inconclusive evidence in prior research, we develop an integrated theoretical framework that combines stakeholder theory, the resource-based view, legitimacy theory, and agency theory and distinguishes between value-creation and risk-perception mechanisms. Using a global panel of 141 listed tourism firms across 26 countries over the period 2002–2021, we adopt a multidimensional perspective on financial performance grounded in the Economic Value Added framework, jointly considering return on equity and the cost of equity. The results show that sustainability has no significant effect on short-term profitability but is associated with a higher cost of equity. These findings highlight asymmetric effects across financial dimensions, suggesting that sustainability may generate offsetting value effects while increasing perceived risk. Overall, the study contributes to the sustainability-finance literature by offering a unified theoretical framework and showing how sustainability influences different dimensions of financial performance through distinct, potentially conflicting mechanisms.