The Effect of ESG Management at Regional Airports on Business Performance - Evidence from Jeju Airport and Gimhae Airport

Abstract

ESG plays an important role in establishing business management strategies around the world. While air transport is growing rapidly in the trade-oriented structure, the aviation industry is the sector with the highest carbon emissions per capita among the transport sector. Research on the airline's ESG management is ongoing, but research on airports shows that insufficient, especially on regional airports. The question of how the local airport industry is preparing for global environmental changes and ESG management activities is the starting point for this study. Based on previous studies, the relationship between ESG(Environmental, Social, Governance) management, reputation, and management performance was analyzed. 578 questionnaires were analyzed for hypothesis testing with the structural equation of AMOS 21.0. First, Environmental (management) positively affects both reputation and business performance. Second, Social (management) had an effect on reputation, but not on business performance. Third, Governance (management) positively affects both reputation and business performance. Fourth, Reputation had an effect on business performance. Therefore, ESG management and reputation could play an important role in the business performance of regional airports(Jeju and Gimhae Airport). In conclusion, the implications of this study and future research directions are presented.