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Crowding Out or Cashing In? The Divergent Effects of Public–private Partnerships on the Market Value of Restaurants

Bibliographic Data

ID21652902
AuthorsDaniel Catalá‐pérez (0000-0001-5042-0239, Universitat Politècnica de València), Juan L Nicolau (0000-0003-0048-2823, Virginia Tech, corresponding author)
Year2025
Publication date2025-10-18
Open AccessYes
TypeARTICLE
VenueJournal of Hospitality & Tourism Research (JOURNAL)
Journal identifiersISSN: 1096-3480 • E-ISSN: 1557-7554
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/10963480251391404
OpenAlexW4415323047
LanguageEN
References cited72

This study examines the impact of a Public–private partnership on the market value of restaurant firms, revealing how a Public–private partnership in tourism promotion may yield uneven economic consequences across hospitality sub-sectors—a crowding-out effect for some restaurants and a cashing-in scenario for others. Using an event study methodology to analyze a paradigmatic Public–private partnership such as the Travel Promotion Act, we find significant negative abnormal returns for quick service and casual dining establishments, and positive abnormal returns for fine dining restaurants. These results underscore the role of economic spillover effects and crowding-out dynamics in restaurant performance. The study contributes to the theoretical understanding of how Public–private partnerships can act as market reconfiguration mechanisms, benefiting restaurants that cater to tourism-driven demand while disadvantaging those more reliant on local consumers. This perspective challenges the assumption that tourism promotion generates universal economic gains, highlighting the need for sector-specific strategies in policy design

Casual · General partnership · Hospitality · Hospitality industry · Spillover effect · Tourism · Consumer Market Behavior and Pricing · Digital Platforms and Economics · Taxation and Compliance Studies

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