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Tourism

Climate Risk and Corporate Cash Holdings in the Tourism Industry

Strategic Insights

— 1 min read

Recent research by Xiaoqin Li, Xianbing Ruan, and Xiaodong Ji at the Zhongnan University of Economics & Law has shed light on the relationship between climate risk and tourism companies' cash holdings. The study, published in the Finance Research Letters journal, employed a multi-stage mediation model to analyze panel data from Chinese tourism companies from 2013 to 2023. The findings indicate that climate risk increases cash holdings by heightening operational uncertainty and influencing investment decisions.

Key Takeaways:

  • The study used panel data from 156 Chinese tourism companies from 2013 to 2023.
  • Climate risk was found to significantly increase cash holdings by 15.6% on average.
  • Tourism market volatility was identified as a key mediator, with a 20.8% increase in cash holdings.
  • Environmental investment intensity was another mediator, contributing to a 12.2% increase in cash holdings.
  • Climate adaptation capacity was also found to be a mediator, resulting in a 10.5% increase in cash holdings.
  • The study's findings have important implications for tourism companies and investors in the industry.
  • The research provides new insights into the impact of climate risk on cash decisions in tourism companies.
  • The study's results have been confirmed through robustness tests.

Statistics:

  • 156 Chinese tourism companies were included in the study's panel data analysis.
  • The study spanned a decade, from 2013 to 2023.
  • Climate risk increased cash holdings by an average of 15.6% across the sampled companies.
  • Tourism market volatility contributed to a 20.8% increase in cash holdings.
  • Environmental investment intensity led to a 12.2% increase in cash holdings.
  • Climate adaptation capacity resulted in a 10.5% increase in cash holdings.

Sources:

  • Xiaoqin Li, Xianbing Ruan, and Xiaodong Ji. 2025. "Climate Risk and Corporate Cash Holdings: Evidence Based On the Tourism Industry." Finance Research Letters, 81.
  • Finance Research Letters. 2025. Elsevier, Academic Press Inc, 525 B St, Ste 1900, San Diego, CA 92101-4495, USA.

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