EPU and financial performance in the hospitality and tourism industry: Moderating effect of CSR, institutional ownership and cash holding

The purpose of this study is to examine the effect of policy-related economic uncertainty (EPU) on the financial performance of hospitality and tourism companies. More precisely, the study aims at revealing how the performance of hospitality and tourism companies is affected at times of increasing EPU, and the role of corporate social responsibility (CSR) engagement, institutional ownership and cash holding to moderate this proposed relationship. The study's sample includes a total of 113 companies from the hotel, restaurant and airline industries for the period 2001-2018. Hypotheses are tested via two-way fixed-effect regression. The study finds that increasing EPU is detrimental to firm performance presented in declining Tobin's Q. However, the magnitude of this negative effect on firm performance becomes less pronounced as firms engage more in CSR, have larger fraction of institutional ownership and hold larger cash and cash equivalents