The Announcement Effects of Regional Tourism Industrial Policy:The Case of the Hainan International Tourism Island Policy in China
Su Zhang and
Nobuyoshi Yamori ()
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Jianjun Sun: College of Tourism Hainan University,China
Su Zhang: School of Economics, Central University of Finance and Economics, China
No DP2014-29, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University
China's Hainan Island has a rich diversity of attractions and opportunities for nature-based tourism, outdoor recreation, and sporting activities. Moreover, Hainan Island has a natural and socioeconomic base and environment, hosting the implementation of a tourism industrial policy. On December 31, 2009, China's State Council announced to the world the national policy of the establishment of Hainan International Tourism Island. Hence, China's Hainan Island is well suited for investigating the announcement effects of regional tourism industrial policy on the market values of firms in a tourist destination region. Based on a sample of 19 listed firms in Hainan, or Hainan concept firms, consisting of various industries, we explore the announcement effects of the national policy of Hainan International Tourism Island using an event-study approach. Two statistical methods, mean adjusted and market-model adjusted, are employed to calculate the daily abnormal returns and the cumulative abnormal returns. The results with and without considering the clustering issue show that, first, the averages of (standardized) accumulative abnormal returns are not different from zero prior to the announcement; second, the (standardized) accumulative abnormal returns of Hainan concept stock continuously go up over trading days after the announcement of a regional tourism industrial policy. As a robustness check, we also investigate the effect of the policy on Guangdong concept listed firms. We find no significant impacts of the policy announcement on the Guangdong concept listed firms. In sum, these findings indicate that regional tourism industrial policy is valuable not only to the tourism industry in the destination region but also to other industries in that region.
Keywords: Announcement effects; Tourism; Regional industrial policy; Tourism industrial identity; Hainan (search for similar items in EconPapers)
JEL-codes: O25 R11 (search for similar items in EconPapers)
Pages: 35 pages
New Economics Papers: this item is included in nep-cse, nep-tra, nep-tur and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:dp2014-29
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