National and Transnational Impacts of Terror on Hotel Stock Prices

Authors

Dlawar M. Hadi, Department of Accounting, College of Business, Komar University of Science and TechnologyFollow
Farman M. Ahmed, Department of Banking and Finance, College of Business Economy, Eastern Mediterranean University, Famagusta, North Cyprus

Corresponding Author

Dlawar M. Hadi

Authors ORCID

0000-0003-1013-7230

Document Type

Research Article

Abstract

This study aims to explore the sensitivity of hotel stock prices to national and transnational terrorist incidents that occur at the world’s top five tourist destinations. Event study analysis and the generalized sign test are the estimation techniques used in this study. Overall, hotel stocks were found to react differently to terrorist activities. U.S. hotel stocks were the most affected, and French hotel stocks were the least affected by domestic terrorist attacks. However, U.K. hotel stocks were the most influenced and Thai hotel stocks were the least influenced by transnational terrorist incidents. Based on the overall findings, several diversification, hedging, and speculation strategies are proposed for mitigating the effects of these influences to financial market stakeholders and hotel managers. This study recommends further studies to be conducted including various sectors to reveal how different sectors react to terrorist activities

Keywords

Event study, Hotel industry, Stock prices, Terrorist incidents, Tourist destinations

How to Cite This Article

Hadi, Dlawar M. and Ahmed, Farman M. (2020) "National and Transnational Impacts of Terror on Hotel Stock Prices," Polytechnic Journal: Vol. 10: Iss. 1, Article 27.
DOI: https://doi.org/10.25156/ptj.v10n1y2020.pp163-169

Publication Date

6-30-2020