Convex-concave effect of financial flexibility on hospitality performance : quantile regression approach
Purpose: The purpose of this paper is to study the influence of financial flexibility (FF) on enterprise performance (EP) within Taiwan’s hospitality industry during the COVID-19 shock and explore whether EP varies with hospitality industry characteristics. Design/methodology/approach: Secondary data of 39 Taiwan Stock Exchange-listed hospitality firms were collected from the Taiwan Economic Journal databases. Quantile regression analysis was applied to examine the FF-EP relationship Findings: The results evidence that there is a U-shaped (convex) FF-EP relationship for hospitality firms in the 10th, 25th and 50th Tobin’s Q quantiles and in asset-heavy firms. For asset-light firms, FF has an inverted U-shaped (concave) effect on EP in the 90th Tobin’s Q quantile Practical implications: The empirical results highlight the need for Taiwan’s hospitality industry as a whole to take rolling adjustment and optimization of FF and concentrate on liquidity risk management after the COVID-19 pandemic and for long-term sustainability. Originality/value: To the best of the authors’ knowledge, this study is one of the first to examine the nonlinear FF-EP relationship in the hospitality industry of Taiwan, particularly amid the COVID-19 shock. Moreover, this study extends current literature by revealing the hospitality industry’s FF-EP relationship and highlights the importance of the pandemic crisis context.
Year of publication: |
2021
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Authors: | Chang, Bao-Guang ; Wu, Kun-Shan |
Published in: |
International Journal of Contemporary Hospitality Management. - Emerald, ISSN 0959-6119, ZDB-ID 2028752-5. - Vol. 34.2021, 2 (23.11.), p. 687-712
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Publisher: |
Emerald |
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