Firm Value and Financial Performance: Impact of Sustainability Disclosure in the Aviation Industry

The Firm Value (FV) and Financial Performance (FP), which cover the firm's operational and financial outputs, are considered as a set of partial organizational effectiveness and financial attitude of stakeholders. Hence, sustainability disclosures contribute value driver factors for firms to maximize the stakeholder's benefits. The adoption and impact of sustainability disclosure in various industries have been shown by numerous existing studies. Astonishingly, some studies lack the adoption of sustainability disclosure in the aviation industry. These impacts on FV and FP in the aviation industry have received little attention and remain largely unexplored, despite an increase in the sustainability disclosure implementation. Hence, this work will focus on the sustainability disclosure's impact on the aviation industry and explore the relationship between sustainability disclosure with FV and FP. Data have been considered from 44 airlines from the Thomson Reuters Eikon database from 2017 to 2022. A study of the result has been analyzed by utilizing multiple Regression Analysis (RA). The outcome displayed that variables of environmental and Governance Pillar Score (GS) have a positive relationship with the FP and FV in the aviation industry. Also, it revealed that the relationship between sustainability disclosure and FV and FP has been significantly moderated by the size of firms.