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Does an Optimal Firm Size Exist for Publicly Traded US Hotels?

Author

Listed:
  • Kwangsoo Park

    (College of Business and Technology, Black Hills State University, USA)

  • Seoki Lee

    (School of Tourism and Hospitality Management, Temple University, Speakman Hall, 1810 N 13th Street, Philadelphia, PA 19122, USA)

Abstract

This study examines whether or not there is an optimal firm size for publicly traded US hotels. More specifically, the study tests a three-stage relationship based on economies and diseconomies of scale: the first stage, in which firm value increases as firm size increases; the second stage, in which firm value remains constant as firm size increases beyond the first stage; and the third stage, in which firm value decreases as firm size transcends the second stage. The study uses the Newey–West heteroskedasticity and the autocorrelation consistent (HAC) standard errors estimation in pooled regression analysis. Findings partially support the proposed relationship.

Suggested Citation

  • Kwangsoo Park & Seoki Lee, 2011. "Does an Optimal Firm Size Exist for Publicly Traded US Hotels?," Tourism Economics, , vol. 17(2), pages 359-372, April.
    • Handle: RePEc:sae:toueco:v:17:y:2011:i:2:p:359-372
    DOI: 10.5367/te.2011.0042
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    References listed on IDEAS

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    Cited by:

    1. Soyon Paek & Jin-Young Kim & Sung Gyun Mun & Chulhee Jun, 2021. "In hotel REITs, are institutional investors beneficial for firm value?," Tourism Economics, , vol. 27(4), pages 820-840, June.

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