![Sample our Built Environment journals, sign in here to start your access, Latest two full volumes FREE to you for 14 days]({"type":"image" , "src" : "/sda/5926/TOC-Subject-Sample-2021-Built-Environment.jpg"})
ABSTRACT
The effect of excessive volatility in world market currencies caused by COVID-19, especially on the tourism industry, is pervasive. This paper examines the foreign currency risk of 131 tourism firms from 19 countries during the period of the COVID-19 pandemic and compares it with the pre-COVID-19 period to analyse the time-variation of firms’ exposure. The study provides evidence that firms face significantly higher currency risk during this pandemic, whereby firm-specific variables, such as operational efficiency, leverage and hedging, are significant determinants of firms’ currency risk in the tourism industry.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Major research includes studies on US (Bartov & Bodnar, Citation1994; Choi & Prasad, Citation1995; Jorion, Citation1990), non-US markets (He & Ng, Citation1998; Loudon, Citation1993) and emerging markets (Chue & Cook, Citation2008; Dominguez & Tesar, Citation2006; Hutson et al., Citation2019; Parsley & Popper, Citation2006).
2 The lagged exchange rate changes were also used as additional explanatory variables in equation (1); however, the primary results remain unchanged. Moreover, the model with time lags was not better in terms of the higher average-adjusted R-square. Further details are mentioned in the supplementary file.
3 Supplementary data are provided.