Do Natural Disasters Alter Tourism Industry Risks Differently over Time?

Li-Ling Liu ()
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Li-Ling Liu: Department of Business Administration, CTBC Business School, No. 600, Sec. 3, Taijiang Blvd., Annan District, Tainan 709, Taiwan

Mathematics, 2025, vol. 13, issue 13, 1-13

Abstract: This study adopted the event study method to explore the effect of the Hualien earthquake on the performance of tourism stocks in Taiwan. This earthquake occurred on 3 April 2024 and affected Hualien and Taitung. The present study examined the short-term (10 trading days), medium-term (12 weeks), and long-term (5 months) performance of all listed tourism companies in Taiwan (overall sample) and six listed tourism companies with a branch in Hualien or Taitung (six-company sample). The results indicated that the stocks of the overall sample rebounded soon after the earthquake but declined over the long-term period. By contrast, the stocks of the six-company sample exhibited a persistent negative return immediately after the earthquake and gradually recovered in the long term. The findings of this study enhance theoretical understanding regarding the effects of a disaster on the stock market. Moreover, they serve as a reference for practical decision-making related to government risk response, investor behavior, and corporate crisis management in high-risk industries, such as tourism. Strengthening disaster preparedness and corporate branding after a disaster is critical for stabilizing market sentiment and industry resilience.

Keywords: risk; earthquake; tourism stock; disaster; Taiwan (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2025
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