Advertising expenses and operational performance: Evidence from the global hotel industry

Michael Polemis (), Thanasis Stengos and Nickolaos G. Tzeremes

Economics Letters, 2020, vol. 192, issue C

Abstract: We investigate the impact of advertising on hotel management companies’ (HMC) operational efficiencies on a sample of 90 international HMCs over the period 2010–2019. We employ time-dependent conditional frontier estimators to investigate the effect on HMCs’ technological change and technological catch-up levels. Our findings support the existence of a non-monotonic convex relationship between HMCs’ advertising expenses and their operational performance. Lastly, we also utilize the double bootstrap approach in a truncated regression setting to validate the overall effect of advertising expenses on HMCs’ operational performance levels. The findings suggest that advertising expenses decrease operational inefficiencies.

Keywords: Advertising expenses; Efficiency and productivity; Hotel management companies; Nonparametric frontier analysis (search for similar items in EconPapers)
JEL-codes: C14 D24 M37 Z31 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:192:y:2020:i:c:s0165176520301579

DOI: 10.1016/j.econlet.2020.109220

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