Leveraging ESG investment to enhance labor employment in hospitality and tourism firms: An signaling theory perspective

Despite the growing focus in hospitality and tourism literature on the impact of environmental, social and governance (ESG) investment on corporate performance, empirical research has yet to explore its effects on labor employment, which are critical to economic vitality and social cohesion. Drawing on signaling theory, this study explores the effect of ESG investment on hospitality and tourism firm’ labor employment. The results of a fixed effects panel model suggest that ESG investment positively influences the labor employment of hospitality and tourism firms. Moreover, this positive effect is stronger for hospitality and tourism firms with fewer financing constraints and less corporate greenwashing. These findings not only reveal some neglected antecedents of labor employment but also shed light on the debate over “doing good” and advancing ESG research in the hospitality and tourism context. This study offers practical insight into how hospitality and tourism firms can promote labor employment through ESG.