The impact of geopolitical risks on travel and leisure stocks

Sercan Demiralay, Erhan Kilincarslan

Research output: Contribution to journalArticle

Abstract

The impact of geopolitical risks on tourism has not received scholarly attention in the existing literature. Previous studies focus on the effects of terrorism, which is a subset of geopolitical risks. Our paper fills this gap and contributes to the literature by analyzing the vulnerability of four regional Travel and Leisure (T&L) industry stock indices to geopolitical risks. Employing traditional and quantile regression techniques, our results suggest a greater sensitivity of T&L stock returns to geopolitical risks at times the industry performs poor, except for Asia & Pacific index that is the most resilient to geopolitical events. We find that the negative effects of geopolitical risks are mostly driven by the threat of adverse geopolitical events only during period of falling T&L stock prices. However, the realization of adverse geopolitical events significantly influences T&L stocks at all times. The results provide potential insights and implications for investors and tourism stakeholders.
LanguageEnglish
Pages460-476
Number of pages17
JournalTourism Management
Volume75
Early online date1 Jul 2019
DOIs
Publication statusE-pub ahead of print - 1 Jul 2019

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travel
event
tourism
Tourism
Terrorism
terrorism
industry
Set theory
investor
Industry
vulnerability
stakeholder
Leisure
threat
regression
literature
index
effect
Adverse events

Cite this

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The impact of geopolitical risks on travel and leisure stocks. / Demiralay, Sercan; Kilincarslan, Erhan.

In: Tourism Management, Vol. 75, 12.2019, p. 460-476.

Research output: Contribution to journalArticle

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