Understanding the effects of economic policy uncertainty on US tourism firms’ performance

Conrado Diego García-Gómez, Ender Demir, Ming-Hsiang Chen and José María Díez-Esteban
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Conrado Diego García-Gómez: University of Valladolid - Duques de Soria Campus, Spain
Ming-Hsiang Chen: Nanjing Xiaozhuang University, China; Washington State University, USA; Guilin University of Technology, China
José María Díez-Esteban: University of Burgos, Spain

Tourism Economics, 2022, vol. 28, issue 5, 1174-1192

Abstract: This study analyzes the impact of economic policy uncertainty (EPU) on the performance of US tourism firms using a sample of 296 publicly traded tourism companies from 2000 to 2018 with a sample of 3068 firm-year observations. Estimation results of panel regressio tests based on the system-generalized method of moments indicate that EPU has a negative impact on return on assets (ROA), return on equity (ROE), and Tobin’s Q. Our results are consistent for different variable specifications. We also find that firm size and leverage play a moderating role in the relationship between EPU and firm performance. Panel quantile regression results show that the impact of EPU on US tourism firm performance is asymmetric. Specifically, low-performing (25% quantile of ROA and ROE) firms are less affected by EPU, and for the case of Tobin’s Q, EPU does not affect firms with a high growth opportunity (100% quantile of Tobin’s Q).

Keywords: asymmetric effects; economic policy uncertainty; quantile regression; system-generalized method of moments; US tourism firms (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:28:y:2022:i:5:p:1174-1192

DOI: 10.1177/1354816620983148

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