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The impact of policy responses to COVID-19 on U S travel and leisure companies
#MMPMIDC7666555
Chen MH
; Demir E
; García-Gómez CD
; Zaremba A
?-/-? 2020[Nov]; 1
(1
): 100003
PMIDC7666555
show ga
This paper analyzes the impact of government restrictions arising from the
COVID-19 pandemic on stock returns of U.S. travel and leisure companies. We
demonstrate that the stringency of government restrictions has a negative impact
on stock returns even after controlling for the pandemic itself. Moreover, stock
prices of travel and leisure firms with a smaller size, less tangibility, and
higher cash reserves are more resilient to the COVID-19 related government
restrictions. Restrictions have the highest impact on airlines, followed by
travel and tourism and casinos and gambling sectors. Our empirical findings
provide valuable policy implications for travel and leisure firm managers,
financial investors, and policymakers.