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Pandemic Fallout: Analyzing the Impact of COVID-19 on Taiwan’s Hotel Stocks

Author

Listed:
  • Ahmad Fraz

    (PIDE School of Economics, Pakistan Institute of Development Economics, Islamabad, Pakistan)

  • Arshad Hassan

    (Faculty of Management and Social Sciences, Capital University of Science and Technology, Islamabad, Pakistan)

  • Shoaib Ali

    (Adnan Kassar School of Business, Lebanese American University, Beirut, Lebanon)

  • Vincent Shin-Hung Pan

    (Department of Information Management, College of Informatics, Chaoyang University of Technology, Taichung, Taiwan)

Abstract

This study attempts to evaluate Taiwanese hotel stock returns in response to the COVID-19 outbreak. This study uses data from fifteen hotel stocks from the Taiwan Capitalization Weighted Stock Index (TAIEX) and implements a t-test and event study methodology. We create the event window from December 31, 2018 to March 31, 2020, which includes the estimation period from December 31, 2018 to December 31, 2019, the pre-announcement period from January 1, 2020 to January 31, 2020 and the post-announcement period from February 1, 2020 to March 31, 2020. In January 2020, the average daily returns exhibited a distinct pattern, as all stocks witnessed negative returns following the announcement of the pandemic alert. The results indicate that hotel stocks show a negative and significant difference in the mean. Moreover, the results of the event study indicate a persistent negative impact on the selected stock. It is therefore important for policymakers to formulate pandemic outbreak strategies in advance that may help investors devise diversification strategies.

Suggested Citation

  • Ahmad Fraz & Arshad Hassan & Shoaib Ali & Vincent Shin-Hung Pan, 2024. "Pandemic Fallout: Analyzing the Impact of COVID-19 on Taiwan’s Hotel Stocks," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 19(01), pages 1-29, March.
    • Handle: RePEc:wsi:afexxx:v:19:y:2024:i:01:n:s2010495224500040
    DOI: 10.1142/S2010495224500040
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    More about this item

    Keywords

    Pandemic; hotel industry; COVID-19; event window; equity returns;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • I19 - Health, Education, and Welfare - - Health - - - Other

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