Research Note: The Impact of State Ownership on Hotel Firms' Characteristics and Financial Performance in China

Ming-Hsiang Chen, Kun Lun Wu and Brendan T. Chen
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Ming-Hsiang Chen: Department of Finance, National Chung Cheng University, Chia-Yi, Taiwan, ROC
Kun Lun Wu: Department of Hotel and Restaurant Management, Chia Nan University of Pharmacy and Science, Tainan City, Taiwan, ROC
Brendan T. Chen: Department of Leisure Industry Management, National Chin-Yi University of Technology, Zhongshan Road, Taiping District, Taichung 41170, Taiwan, ROC

Tourism Economics, 2013, vol. 19, issue 5, 1207-1214

Abstract: While previous studies have documented that state ownership (SO) plays a significant role in China's hotel industry, no research has formally tested its influence on the hotel industry in China. This study examines the impact of SO on hotel firms' characteristics and financial performance based on panel data methodology. The characteristics of hotel firms are size, leverage, liquidity, operating efficiency and growth opportunity. Three financial performance measures are: return on assets (ROA), return on equity (ROE) and stock return. The test results reveal that hotels with high SO in China are small and have high debt leverage and low liquidity. However, SO does not have a strong influence on ROA, ROE and stock return. Finally, policy implications are offered to guide the Chinese government and hotel business owners and managers.

Keywords: hotel industry; firm characteristics; financial performance; China (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:19:y:2013:i:5:p:1207-1214

DOI: 10.5367/te.2013.0240

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