• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Quaterly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Managing Editor: Ms. Shira. W. Lu
    • Abstracting/ Indexing:  Crossref, Electronic Journals Library , EBSCO
    • E-mail: ijtef.editorial.office@gmail.com
HOME > Archive > 2023 > Volume 14 Number 2 (May 2023) >
IJTEF 2023 Vol.14(2): 17-24 ISSN: 2010-023X
DOI: 10.18178/ijtef.2023.14.2.750

Tourism Firm Performance on Economic Risk and Return in Malaysia under Climate Change Context

Chuiehong Tan*, Seenie Lee, and Shufen Chuah

Abstract—Tourism demand leads to economic growth, but empirical studies of tourism sector performance on economic risk nexus have been quite scant, especially under climate change context. This paper studies the influence of tourism firm financial performance on volatility and growth in Malaysia. Three types of firm volatility are measured by standard deviation, GARCH(1,1) and EGARCH models. The effect of tourism firm performance on volatility of firms’ stock return and economic growth under climate change and environmental hazards condition is further examined. This study focuses panel data in Malaysia from years 2010 until 2021. Data were contentanalyzed and coded into weather types, firm performance and stock return volatility. Climate change data consist of temperature extremes, the intensity of rain events, rain days, floods and extreme events. Environmental hazards data include carbon dioxide emissions (CO2), greenhouse gas emissions (GHG) and air quality index (AQI). The results statistically reveal that (i) financial performance is a significant factor in explaining the volatility of tourism firms and economic growth (ii) better financial performance contributes to economic growth under climate change context (iii) tourism firm financial performance induces environmental hazards, especially CO2 and thus affects the tourism firms’ financial risk in Malaysia. Results from this study are important to policymakers who should spare no effort to mitigate the effect of climate change in the context of tourism performance and economic risk. This study provides detailed insights into the sensitivity of tourism firm performance on economic risk, and their current ability to deal with climate change issue.

Index Terms—Tourism firm financial performance, climate change, environmental hazards, stock return volatility, economic development

Chuiehong Tan and SeeNie Lee are with the Faculty of Management, Multimedia University, Cyberjaya, Selangor, Malaysia.
Shufen Chuah is with the Faculty of Business. Economics and Social Development, Universiti Malaysia Terengganu, Terengganu, Malaysia. *Correspondence: chtan@mmu.edu.my (C.T.)

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Cite: Chuiehong Tan, Seenie Lee, and Shufen Chuah, "Tourism Firm Performance on Economic Risk and Return in Malaysia under Climate Change Context," International Journal of Trade, Economics and Finance vol.14, no.2, pp. 17-24, 2023.

Copyright © 2023 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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