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COVID-19 and firm value drivers in the tourism industry

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  • Poretti, Cédric
  • Heo, Cindy Yoonjoung

Abstract

Using an international sample of 1315 observations for 194 listed tourism firms from 2012 to 2019, we investigate the impact on firm value of DuPont components, namely asset turnover and profit margin. Next, using an event study methodology, we analyze how these components are associated with the stock market reaction to the COVID-19 pandemic announcement. The results indicate that over 2012–2019, the association of performance with firm value is mostly driven by tourism companies' ability to become more efficient with their asset base, while both profitability and productivity levels are significant predictors of firm value one year ahead. Abnormal returns surrounding the pandemic announcement appear to be more negative for more productive firms, while the latter enjoyed a stronger recovery.

Suggested Citation

  • Poretti, Cédric & Heo, Cindy Yoonjoung, 2022. "COVID-19 and firm value drivers in the tourism industry," Annals of Tourism Research, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:anture:v:95:y:2022:i:c:s0160738322000846
    DOI: 10.1016/j.annals.2022.103433
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    2. Michal Drabek & Daniel Pastorek, 2023. "The impact of ownership structure on the market value of companies in response to COVID-19," MENDELU Working Papers in Business and Economics 2023-87, Mendel University in Brno, Faculty of Business and Economics.
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    5. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).

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