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The Impact of ESG Criteria on Firm Value: A Strategic Analysis of the Airline Industry

Author

Listed:
  • Ferah Yildiz

    (Faculty of Business Administration, Kocaeli University, Kocaeli 41310, Turkey)

  • Faruk Dayi

    (Faculty of Economics and Administrative Sciences, Kastamonu University, Kastamonu 37150, Turkey)

  • Mustafa Yucel

    (Faculty of Economics and Administrative Sciences, Kastamonu University, Kastamonu 37150, Turkey)

  • Ali Cilesiz

    (Kastamonu Vocational School, Kastamonu University, Kastamonu 37150, Turkey)

Abstract

Environmental, social, and governance (ESG) factors are crucial in evaluating a company’s value. High ESG scores reflect ethical practices, social responsibility, and effective governance. This paper examines the impact of ESG criteria on firm value within the airline industry, focusing on their influence on operational efficiency, risk reduction, and financial performance. Using panel data analysis, the study evaluates ESG scores from 32 airline companies over the period of 2018–2023, with an explanatory power of 36.5%. The research explores how integrating environmental, social, and governance factors into strategic management can foster sustainable competitive advantage. It focuses on utilizing internal resources, meeting the needs of various interested parties, and balancing financial, social, and environmental performance. The findings indicate that while ESG practices enhance firm value through improved efficiency and risk management, they do not always lead to higher short-term firm value. Moreover, the study underscores the significance of governance in the airline industry, where robust governance structures can mitigate risks but may also increase costs. This research contributes to the literature by providing empirical evidence of the link between ESG performance and firm value in the airline industry, emphasizing the importance of integrating ESG principles into strategic management for long-term sustainability and financial success.

Suggested Citation

  • Ferah Yildiz & Faruk Dayi & Mustafa Yucel & Ali Cilesiz, 2024. "The Impact of ESG Criteria on Firm Value: A Strategic Analysis of the Airline Industry," Sustainability, MDPI, vol. 16(19), pages 1-23, September.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:19:p:8300-:d:1484540
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    Cited by:

    1. Mustafa Yucel & Sevgi Yucel, 2024. "Environmental, Social, and Governance (ESG) Dynamics in the Energy Sector: Strategic Approaches for Sustainable Development," Energies, MDPI, vol. 17(24), pages 1-19, December.
    2. Mustafa Yucel & Guler Yanik & Faruk Dayi & Ayhan Benek, 2025. "Strategic Management of Environmental, Social, and Governance Scores and Corporate Governance Index: A Panel Data Analysis of Firm Value on the Istanbul Stock Exchange," Sustainability, MDPI, vol. 17(11), pages 1-24, May.
    3. Maria Fernanda Bernal Salazar & Elisa Baraibar-Diez & Jesús Collado-Agudo, 2025. "CSR and Corporate Sustainability: Theoretical and Empirical Approaches Based on Data Science in Spanish Tourism Companies," Sustainability, MDPI, vol. 17(6), pages 1-35, March.
    4. Melik Ertuğrul & Eylül Özdarak, 2025. "Measuring Airline Performance: An Integrated Balanced Scorecard-Based MEREC-CoCoSo Model," Sustainability, MDPI, vol. 17(13), pages 1-25, June.

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