The momentum effect on Taiwanese hotel stocks. (April 2018)

• Record Type: Journal Article
• Authors: Chen, Ming-Hsiang; Zhao, Zhang; Wang, Keling; Lv, Wan Qing
• Is Part Of: International journal of hospitality management. Volume 71(2018)
• Page Start: 141
• Page End: 150
• Publication Date: 2018-04
• Subjects: Momentum effect -- Behavioral finance -- Hotel stocks; Hotel management -- Periodicals; Restaurant management -- Periodicals; Food service management -- Periodicals; Hôtels -- Gestion -- Périodiques; Restaurants -- Gestion -- Périodiques; Services alimentaires -- Gestion -- Périodiques; Food service management; Hotel management; Restaurant management; Periodicals; 647.94
• DOI: 10.1016/j.ijhm.2017.09.011
• Languages: English
• ISSNs: 0278-4319

Abstract

Highlights: This study extends the hospitality finance research to the area of behavioral finance. This study examines the momentum effect on Taiwanese hotel stocks. There is a negative momentum effect on hotel stocks for the short, medium and long horizons. The negative momentum is also found on different hotel firm performance levels and in different stock market conditions. Abstract: By extending the hospitality finance research to the area of behavioral finance, this study examines the momentum effect in the hotel industry. This paper determines whether or not there is a momentum effect on hotel stocks in the Taiwan stock market. The results of empirical tests reveal several unique findings. The momentum factor is found to be a significant determinant of hotel stock returns in Taiwan. Specifically, there is a negative momentum effect in the Taiwanese hotel industry for the short horizon (one month), the medium horizons (three, six and 12 months) and the long horizons (18 and 24 months). Moreover, the negative momentum for the medium (three-, six- and 12-month) horizons is consistent and persistent on different hotel firm performance levels and under different stock market conditions. These empirical findings offer a valuable investment strategy for investors who are interested in hotel stocks.