Sustainability, innovation, and competitive advantage in tourism: An event study of the inflation reduction act

This study analyzes the impact of policy-induced changes on the market valuation of tourism and hospitality firms, focusing on green innovation and competitive advantage. Using a sample of publicly listed tourism and hospitality firms in the United States, and drawing on an integrated theoretical framework, we examine how policy shifts reshape competitive dynamics. More precisely, this paper analyzes how legislative events related to the Inflation Reduction Act affected firms’ market value fluctuations. The main results indicate that first-movers in green innovation initially benefited from policy uncertainty but faced competitive erosion once the approval of the new policy reduced entry barriers for competitors. These findings contribute to the strategic management and sustainability literature, highlighting the need for continuous innovation beyond regulatory incentives to sustain long-term differentiation.