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Does VIX scare stocks of tourism companies?

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Abstract

In the recent time, there has been increasing importance of tourism development to the global economic dynamics inspite of the global uncertainties. In this regard, the current study is aimed to find out if the volatility index (VIX) affects the returns of the firms operating in the tourism sector in 11 countries. The relationship between the variables in the study was tested through causality and cointegration tests. As a result, the change in the VIX was found to have causality towards the change in the tourism indices of the countries except for the USA and Sri Lanka. In addition, it was found that there was a long-term relationship between the variables and that the increase in VIX caused a decrease in the return of tourism indices. Hence, the current study offers significant policy direction for the tourism industry operations and the government of the examined destination countries.

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Authors and Affiliations

  1. Faculty of Applied Science, Banking and Finance, Tarsus University, Tarsus, Turkey

    Saffet Akdağ

  2. Department of Travel Tourism and Entertainment Services, Akdağmadeni Vocational High School, Bozok University, Yozgat, Turkey

    İlker Kiliç

  3. International Logistics and Transportation, Faculty of Economics, Administrative and Social Sciences, İstanbul Gelişim University, Istanbul, Turkey

    Hakan Yildirim

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  1. Saffet Akdağ
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  2. İlker Kiliç
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Correspondence to Hakan Yildirim.

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Graphs of Breitung and Candelon frequency causality analysis

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Akdağ, S., Kiliç, İ. & Yildirim, H. Does VIX scare stocks of tourism companies?. Lett Spat Resour Sci 12, 215–232 (2019). https://doi.org/10.1007/s12076-019-00238-w

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