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Do Natural Disasters Alter Tourism Industry Risks Differently over Time?

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  • Li-Ling Liu

    (Department of Business Administration, CTBC Business School, No. 600, Sec. 3, Taijiang Blvd., Annan District, Tainan 709, Taiwan)

Abstract

This study adopted the event study method to explore the effect of the Hualien earthquake on the performance of tourism stocks in Taiwan. This earthquake occurred on 3 April 2024 and affected Hualien and Taitung. The present study examined the short-term (10 trading days), medium-term (12 weeks), and long-term (5 months) performance of all listed tourism companies in Taiwan (overall sample) and six listed tourism companies with a branch in Hualien or Taitung (six-company sample). The results indicated that the stocks of the overall sample rebounded soon after the earthquake but declined over the long-term period. By contrast, the stocks of the six-company sample exhibited a persistent negative return immediately after the earthquake and gradually recovered in the long term. The findings of this study enhance theoretical understanding regarding the effects of a disaster on the stock market. Moreover, they serve as a reference for practical decision-making related to government risk response, investor behavior, and corporate crisis management in high-risk industries, such as tourism. Strengthening disaster preparedness and corporate branding after a disaster is critical for stabilizing market sentiment and industry resilience.

Suggested Citation

  • Li-Ling Liu, 2025. "Do Natural Disasters Alter Tourism Industry Risks Differently over Time?," Mathematics, MDPI, vol. 13(13), pages 1-13, June.
    • Handle: RePEc:gam:jmathe:v:13:y:2025:i:13:p:2046-:d:1683614
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