Tourism Carbon Emission and Financial Performance: A Comparison Between Developing and developed nations

While extensive research has explored green practices and firm performance across various disciplines, the causal relationship within this linkage remains insufficiently explored, particularly when moderating roles of governance and culture are considered. This study addresses this essential gap by examining the causal impacts of carbon emissions (CE) on financial performance (FP) using global tourism data from 2004 to 2022. Employing an original empirical approach using OLS and GLM regressions, the findings reveal that an increase in CE leads to a decrease in FP. This is across developing and developed nations, with this effect being more pronounced in the latter. Moreover, the relationship is found to be moderated by governance and cultural factors. The robustness of the results is confirmed through alternative regression models and the control of firm and country-level characteristics. Ultimately, the study suggests that reducing CE with an eye toward FP enhancement should inform the tourism firms’ managerial, directorial, and regulatory bodies, advocating for implementing governance codes and guidelines to improve green practices.