Climate Policy Uncertainty and Corporate Investment: Evidence From the U.S. Tourism and Hospitality Sector

Jing Gao, Lei Zhang*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)

Abstract

We examine the association between climate policy uncertainty (CPU) and corporate investment using U.S. data on tourism and hospitality firms over the period 2001–2020. We find that the aggregate country-level CPU is significantly negatively associated with capital investment, with the impact extending at least 4 years into the future. In particular, we find that CPU has an influence on firms’ capital investment that is incremental to economic policy uncertainty (EPU). By contrast, we document that CPU is unrelated to R&D investment. Our main findings are robust to a battery of sensitivity tests, including an instrumental variable approach and sub-industry analyses. Overall, our findings highlighting the impact of CPU on capital investment have significant implications for academics, managers, and policy makers.

Original languageEnglish
Pages (from-to)517-530
Number of pages14
JournalJournal of Travel Research
Volume63
Issue number2
DOIs
Publication statusPublished - Feb 2024

Keywords

  • R&D investment
  • capital investment
  • climate policy uncertainty
  • economic policy uncertainty
  • tourism

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