The impact of geopolitical risks on cash holdings of hospitality companies: Evidence from emerging countries

This paper examines the relationship between geopolitical risks (GPR) and corporate cash holdings in emerging countries, where such kind of risks are more relevant. Our sample consists of 166 hospitality companies from seven emerging economies (Malaysia, Mexico, Thailand, Turkey, Argentina, Brazil and China) for the period 2008-2017. The results show that geopolitical risks negatively affect cash holdings of hospitality firms, confirming the high dependence of hospitality business on geopolitical sways. We also test if our findings are relevant when considering ALFO strategy in hospitality companies. The findings are robust to alternative models and selection of sub-samples. This study adds to the incipient literature on hospitality companies' cash holdings determinants by considering GPR as an alternative measure of uncertainty in the hospitality industry. Consequently, this paper contributes to enhancing the understanding of hospitality firms' business characteristics, highly sensitive to geopolitical risks.