Blessing in Disguise? Environmental Shocks and Performance Enhancement

73 Pages Posted: 26 Jun 2018 Last revised: 2 Dec 2018

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Long Wang

ShanghaiTech University - School of Entrepreneurship and Management

Yang Yang

The Chinese University of Hong Kong - CUHK Business School

Multiple version iconThere are 2 versions of this paper

Date Written: November 3, 2018

Abstract

This study focuses on the impact of pollution shocks on the productivity in the service sector. We show that the review scores of hotels in Singapore dropped sharply during the haze periods and reverted immediately to and exceeded eventually their previous level after the haze shock. The analysis on subcategory score reveals that guests’ mood other than service quality of hotels leads to the decline of review score during the haze episode. Further, we find hotels with managers closely monitor online reviews and respond to negative reviews show significant improvements. Our findings shed light on the importance of realizing deficiencies in management and operation in the presence of negative shocks and contribute to a growing literature on environment, interruption, and management.

Keywords: Valuation of Environmental Effects, Air pollution, Tourism, Information and Learning, Firm Behavior, Social Media, User-generated content, Consumer rev

JEL Classification: Q51, Q53, Z3, D83, D22

Suggested Citation

Agarwal, Sumit and Wang, Long and Yang, Yang, Blessing in Disguise? Environmental Shocks and Performance Enhancement (November 3, 2018). Available at SSRN: https://ssrn.com/abstract=3189351 or http://dx.doi.org/10.2139/ssrn.3189351

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Long Wang

ShanghaiTech University - School of Entrepreneurship and Management ( email )

No.393 Middle Huaxia Road
Pudong district
Shanghai, AK Shanghai 210201
China

Yang Yang (Contact Author)

The Chinese University of Hong Kong - CUHK Business School ( email )

7/F, Cheng Yu Tung Building
12 Chak Cheung Street, Hong Kong
Hong Kong
Hong Kong

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