Covid-19 Shock, Financial Flexibility, and Hotels' Performance Nexus

Bibliographic Data

ID22080413
AuthorsXuehui Zhang (0000-0002-3759-8056, Inner Mongolia University of Technology), Bao‐Guang Chang (0000-0001-9352-8012, Tamkang University), Bao-Guang Chang, Kun‐Shan Wu (0000-0001-9550-8840, Tamkang University, corresponding author)
Year2022
Volume10
Pages792946-792946
Publication date2022-04-18
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueFrontiers in Public Health (JOURNAL)
Journal identifiersISSN: 2296-2565 • E-ISSN: 2296-2565
PublisherFrontiers Media SA (PUBLISHER • CH)
DOI10.3389/fpubh.2022.792946
PMID35509510
OpenAlexW4223905850
LanguageEN
Citations received2
References cited65

This study investigates the nexus of coronavirus disease 2019 (COVID-19) shock, financial flexibility (FF), and firm performance (FP) in Taiwan listed hotel firms. Quantile regression (QR) methods were used to analyze the data from Taiwan Stock Exchange listed hotel firms between 2020 Q1 and 2021 Q2. The results evidence that there is an inversed U-shaped linkage between FF and FP for the hotel industry. Additionally, FF has an inverted U-shaped effect on FP for the asset-light hotel firms for all quantiles except the 50th quantile. In addition, FF also has an inverted U-shaped impact on FP for the asset-heavy hotel firms in the 10th and 90th quantiles. A significant finding in this study is that there is a concave non-linear relationship between FF and FP, consistent with the law of diminishing marginal return. That is, with an increase in FF, the FP is on the rise; when FF exceeds the inflection point level, the FP begins to decline. Thus, a firm must ensure that the FF strategy it adopts must be the most efficient and effective, i.e., it must bring the trade-off between costs and benefits. The empirical results highlight the need for the hotel industry of Taiwan to take the rolling adjustment and optimization of FF after the COVID-19 pandemic for long-term sustainability

Boom · Business · Econometrics · Economics · Quantile · Quantile regression · Stock exchange · Computer Science · Corporate Finance and Governance · Corporate Social Responsibility Reporting · COVID-19 Pandemic Impacts · Finance

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