has been acknowledged as one of the largest and fastest-growing economic sectors in the world [reaching 9% of the world gross domestic product (GDP)] and is believed to be experiencing continued expansion [United Nations World Tourism Organization (UNWTO), 2014a]. Europe is the most visited region in the world (UNWTO, 2014a) despite the challenges set by the economic and financial crises, and the industry This article aims to evaluate the market performance of the European tourism industry from 2004 to 2014, a period that includes the financial and economic crises, to highlight which macroeconomic factors influenced the industry stock returns. The Stoxx Europe 600 Travel & Leisure price index is used to proxy the industry stock performance, and a multifactor market model is employed to individuate which macroeconomic variables are able to drive tourism stock performance. Results highlight that tourism stock performance is influenced by market conditions and by uncertainty, measured through the Chicago Board Options Exchange Volatility index (VIX). Despite the importance of tourism in Europe and its contribution to the economic growth, there is scant evidence on the performance of this industry in this area and on its relationship with economic conditions. The article, to the best of knowledge, represents the first contribution on the performance of European tourism industry in crisis years with a macroeconomic perspective.
Capital regulation acts as an external force in the determination of bank capital and risk levels. Changes in the regulatory framework can influence banks' decisions. Starting from the debate of the prudential regulation after the financial crisis, this paper reviews the main empirical contributions on the role of capital regulation in the determination of banks' capital ratios and risk exposure to evaluate bank behavior. Capital and risk decisions seem to be effectively influenced by regulation, although results may vary according to factors such as time period, country, and the type of capital analyzed. Comparative Economic Studies (2015) 57, 31-54.
We explore whether a greater amount of environmental disclosure can reduce a firm's ex ante cost of equity. This could occur because the quantity of environmental information changes investors' risk perception of the company, thereby influencing its ex ante cost of equity. Our study is a cross-country analysis of 1481 multinational corporations (MNCs) across 43 countries and territories from 2013 to 2019. Firstly, we measure investors' risk perception as a firm's ex ante cost of equity by employing five different valuation models, all based on equity analysts' forecasted data. We then investigate whether large quantities of environmental information disclosed by an MNC affect its ex ante cost of equity. We find evidence that investors price the amount of environmental disclosure. More environmental disclosure decreases a firm's ex ante cost of equity because it lessens investors' information asymmetry.However, this relationship is non-linear. Once the amount of environmental disclosure data exceeds a certain threshold level, a firm's ex ante cost of equity will rise again. Our empirical results also suggest that non-financial factors at the country level play a role in shaping how investors perceive a firm's riskiness. Locating the firm in a country with better environmental performance and a higher score of the human development index can reduce investors' risk perception and result in a lower ex ante cost of equity. A policy implication of our findings is that a global standardised and effective corporate sustainability reporting is needed to provide investors a more holistic view for evaluating the riskiness of their investments.
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