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The tourism industry's deep interindustry linkages makes it a significant engine of growth for an economy. When aligned with specific sustainability goals, it becomes an effective means of inclusive prosperity and environmental protection. Coming fresh from the lockdown, investors and stakeholders are more conscious of their investing and spending decisions preferring more and more businesses and industries with sustainable business practices (Leal Filho et al., 2022). Specifically, tourism's generation of business and customer values must also extend to generation of value to the environment, society, and even on governance (GIZ, 2020). This chapter, using a system's view approach, demonstrates how activities in the tourism value chain – besides being an engine of growth – can also be the vehicle to attaining environmental, social, and governance (ESG) aspirations.

In this study, we examine the relationship between political connections of private firms and the initial public offering process. Using registration statement information, we create a unique database of politically connected IPO firms. We find that political connections are substitutes to high-quality underwriters and big four auditors. Politically connected firms manage earnings more highly upward than non-connected firms prior to the public offering. Politically connected firms also exhibit less underpricing than non-connected firms. Finally, politically connected IPO firms have superior post-IPO returns relative to non-connected IPO firms.

Many companies use competition for either monetary or non-monetary rewards to induce employee effort. Pitting employees against each other in a competition could come at a thus far insufficiently considered cost of leading to lower employee cooperation. The authors examine how competition for monetary rewards in the form of tournament incentives or non-monetary rewards in the form of standing in uncompensated public rankings affects employee cooperation with former competitors in a subsequent task where the extent of the cooperation does not affect the welfare or social standing of the person deciding to cooperate. The authors hypothesize that competition in the first task negatively affects cooperation in the second task. The authors further predict that competition leads to psychological pressure, which mediates differences in cooperation. The results support the authors’ hypotheses. In addition, the authors find that the decrease in cooperation results from the behavior of low performers, whereas cooperation by high performers is not affected. The findings are important because they show that inducing effort in one dimension leads to an unintended cost in the form of lower cooperation in another dimension. This cost occurs for both types of competition – competition for monetary payoffs and for non-monetary rewards. Ultimately, the size of this cost depends on the marginal benefit from any cooperation of low performers.

Companies are starting to capitalize on the potential of experimental economics as a decision-making tool. Hewlett-Packard (HP) is one of such pioneering companies. Experiments, conducted at HP Labs, were used to test retailer contract policies in three areas: return, minimum advertised-price (MAP), and market development funds. The experimental design models the multifaceted contemporary market of consumer computer products. While the model is quite complex, participants were found to be effective decisions-makers and that their behavior is sensitive to variations in policies. Based on the experimental results, HP changed its policies; for example, it made the consequences for minimum advertisement price violations forward-looking as well as backward-looking. This line of research appears promising for complex industrial environments. In addition, methodological issues are discussed in the context of differences between business and academic economics experiments. Finally, the author speculates about potential future business applications.

This paper examines factors that are associated with the level of a firm's environmental disclosure in the footnotes of its annual report financial statements and its 10-K report filed with the Securities and Exchange Commission (SEC). The levels of environmental disclosure are measured using the Wiseman scale (Wiseman, 1982). An N-chotomous probit analysis is utilized where the level of disclosure is the dependent variable, and the independent variables are firm characteristics including: (1) institutional blockholder stock ownership, (2) amount of foreign concentration, (3) earnings volatility, (4) profitability, (5) leverage, (6) future need for debt financing, (7) firm size, and (8) industry membership.

The results indicate that higher foreign concentration, and to some extent, higher earnings volatility are associated with less environmental disclosure. These results provide evidence that firms with higher foreign concentration are more reluctant to disclose environmental information because they are under higher scrutiny from other countries and the international community. Additionally, it is probable that firms with a more volatile earnings process are less willing to disclose potential environmental costs and obligations because these additional expenditures can have an especially adverse effect during low-earnings periods.

This chapter investigates whether earnings management activities increase the likelihood of receiving a qualified audit report. We have carried out this study with a sample of Spanish companies for the period 2001–2009. Previous research on the issue is not only scarce but also suffers from methodological pitfalls. In all cases, researchers have followed a matched sample approach without considering the implications of such approach for the statistical analysis. Despite its great popularity among researchers in accounting, the use of matched-based sampling is susceptible to produce technical errors in the statistical analysis. The main problem consists in the generalization of results obtained with a nonrandom sample to the whole population of firms. Our results do not show a significant relationship between EM and qualified audit reports. We have also addressed whether the international financial crisis has affected our results and concluded that Spanish companies seem to have used EM during the crisis to push down earnings, probably expecting to take advantage of the positive earnings surprises during the postcrisis period. Nevertheless, the financial crisis has not changed the nature of the EM-qualified opinions relationship.

The “time value of money principle,” a building block of finance theory and practice, states that money today is worth more than money in the future. In this chapter, we argue that this principle is not consistent with intergenerational equity or sustainability.

We demonstrate that standard capital budgeting negatively affects sustainability by presenting two numerical examples and by discussing the role of financial markets in the time value of money and the discount rate. We then discuss Silvio Gesell’s (1862–1930) concept of Freigeld as a possible alternative framework for a “socially optimal” discount rate.

We show that the time value of money principle, as employed in standard capital budgeting techniques, tends to reject sustainable projects (that only break even in the long run) and accept unsustainable projects (that break even in the short term but entail significant long-term negative externalities). We find that fiat currencies offer interesting perspectives in the context of sustainability.

We show that money, interest rates and investment valuation techniques are not merely technical tools, but have important institutional, social, and political attributes. Taken together with current global demands for sustainability, this observation could justify a new research agenda seeking to redefine current capital budgeting techniques.

We stress that the “time value of money principle” should not be viewed as a technical tool, but rather, as a social and political construct. We argue that the principle needs to be reconsidered given the current global sustainability crisis.

The economics literature considers that externalities indicate a market failure, to which policy makers should respond by introducing optimal tax incentives and regulation. At the same time, the management studies literature has proposed a set of initiatives to align corporate governance with sustainability principles. This chapter examines an issue that concerns both these literatures, that is, the relationship between sustainability and the time value of money.