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The Announcement Effects of Regional Tourism Industrial Policy:The Case of the Hainan International Tourism Island Policy in China

Author

Listed:
  • Jianjun Sun

    (College of Tourism Hainan University,China)

  • Su Zhang

    (School of Economics, Central University of Finance and Economics, China)

  • Nobuyoshi Yamori

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

China's Hainan Island has a rich diversity of attractions and opportunities for nature-based tourism, outdoor recreation, and sporting activities. Moreover, Hainan Island has a natural and socioeconomic base and environment, hosting the implementation of a tourism industrial policy. On December 31, 2009, China's State Council announced to the world the national policy of the establishment of Hainan International Tourism Island. Hence, China's Hainan Island is well suited for investigating the announcement effects of regional tourism industrial policy on the market values of firms in a tourist destination region. Based on a sample of 19 listed firms in Hainan, or Hainan concept firms, consisting of various industries, we explore the announcement effects of the national policy of Hainan International Tourism Island using an event-study approach. Two statistical methods, mean adjusted and market-model adjusted, are employed to calculate the daily abnormal returns and the cumulative abnormal returns. The results with and without considering the clustering issue show that, first, the averages of (standardized) accumulative abnormal returns are not different from zero prior to the announcement; second, the (standardized) accumulative abnormal returns of Hainan concept stock continuously go up over trading days after the announcement of a regional tourism industrial policy. As a robustness check, we also investigate the effect of the policy on Guangdong concept listed firms. We find no significant impacts of the policy announcement on the Guangdong concept listed firms. In sum, these findings indicate that regional tourism industrial policy is valuable not only to the tourism industry in the destination region but also to other industries in that region.

Suggested Citation

  • Jianjun Sun & Su Zhang & Nobuyoshi Yamori, 2014. "The Announcement Effects of Regional Tourism Industrial Policy:The Case of the Hainan International Tourism Island Policy in China," Discussion Paper Series DP2014-29, Research Institute for Economics & Business Administration, Kobe University.
  • Handle: RePEc:kob:dpaper:dp2014-29
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    File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2014-29.pdf
    File Function: Revised version, 2014
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    Cited by:

    1. Jianjun Sun & Nobuyoshi Yamori, 2016. "How Did the Introduction of Deposit Insurance Affect Chinese Banks? An Investigation of Its Wealth Effect," Discussion Paper Series DP2016-20, Research Institute for Economics & Business Administration, Kobe University.

    More about this item

    Keywords

    Announcement effects; Tourism; Regional industrial policy; Tourism industrial identity; Hainan;

    JEL classification:

    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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