Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Impact of the Relaxation of Visits by Mainland China Tourists to Taiwan on Stock Returns and Financial Performance: The Case of Listed Tourism Industry Firms


Author Info

  • Erin H. Kao

    (Department of Finance, Ling Tung University, Taiwan)

  • You-De Dai

    (Graduate Institute of Recreation, Tourism, and Hospitality Management, National Chiayi University, Taiwan)

Registered author(s):


    The purpose of this study is to examine the impact on listed tourism industry firms of the relaxation of the policy to allow Mainland China tourists to visit Taiwan directly for sightseeing from a financial viewpoint. First, before the implementation of the policy, this study applied the "event study method" to investigate the effects on the stock prices of the announcement of the open policy. The results indicate that, except for the Aviation industry, the announcement has given rise to significantly abnormal returns to tourism industry stocks, but there has only been a short-term effect lasting one or two days. Moreover, following the implementation of the policy, the study uses the T-test and Wilcoxon test to examine the differences in financial performance on the listed tourism industry firms. The results show that it is only for the category of Hotel and Amusement firms, one of the operating efficiency indicators, that the "Sales per employee" variable has significantly increased. Other indicators of financial performance have almost all significantly decreased. This implies that the open policy does not substantially improve the financial performance of listed tourism industry firms as we expected.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    Bibliographic Info

    Article provided by College of Business, Feng Chia University, Taiwan in its journal Journal of Economics and Management.

    Volume (Year): 7 (2011)
    Issue (Month): 2 (July)
    Pages: 257-283

    as in new window
    Handle: RePEc:jec:journl:v:7:y:2011:i:2:p:257-283

    Contact details of provider:
    Postal: 100 Wenhwa Road, Seatwen, Taichung
    Web page:
    More information through EDIRC

    Related research

    Keywords: Mainland China tourists; tourism policy; event study method; abnormal returns; financial performance;

    Find related papers by JEL classification:


    No references listed on IDEAS
    You can help add them by filling out this form.



    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:jec:journl:v:7:y:2011:i:2:p:257-283. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Yi-Ju Su).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.