The Impact of Market Volatility on Hotel Efficiency in Malaysia: Does Hotel Size Matter?

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Table of Contents

• Policy Research Working Papers are also posted on the Web at httpwww.worldbank.orgprwp. The authors may be 2
• 1. Introduction 4
• 2. Literature review and conceptual framework 6
• 3. DEA methodology 10
• 𝜑𝜑 𝑀𝑀𝑀𝑀𝑀𝑀 𝜆𝜆 𝑠𝑠 𝑠𝑠 1 1 𝑚𝑚 𝑠𝑠 11
• 𝑥𝑥 𝑥𝑥 𝜆𝜆 11
• 𝑠𝑠 𝑀𝑀 1 . . 𝑚𝑚 11
• 𝑦𝑦 𝑦𝑦 𝜆𝜆 11
• 𝑠𝑠 𝑟𝑟 1 . . 𝑠𝑠 11
• 1 𝜆𝜆 0 𝑗𝑗 𝑠𝑠 0 𝑀𝑀 𝑠𝑠 0 𝑀𝑀 11
• 𝑠𝑠 and 𝑠𝑠 11
• 4. Data source and main variables 13
• 𝐸𝐸𝐸𝐸𝐸𝐸𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝑀𝑀𝐸𝐸𝑦𝑦 𝛼𝛼 𝛽𝛽 𝑋𝑋 𝐻𝐻𝐻𝐻𝐻𝐻𝐸𝐸𝐻𝐻 𝑠𝑠𝑀𝑀𝑠𝑠𝐸𝐸 𝛽𝛽 𝑋𝑋 𝛽𝛽 𝐻𝐻𝐻𝐻𝐻𝐻𝐸𝐸𝐻𝐻 𝑠𝑠𝑀𝑀𝑠𝑠𝐸𝐸 13
• 𝑅𝑅𝐸𝐸𝑅𝑅𝑀𝑀𝐻𝐻𝑀𝑀 𝐸𝐸𝑀𝑀𝑥𝑥𝐸𝐸𝑓𝑓 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐻𝐻𝑠𝑠 𝐵𝐵𝐵𝐵𝑠𝑠𝐸𝐸𝐻𝐻𝑀𝑀𝑀𝑀𝐸𝐸 𝐶𝐶𝐻𝐻𝑀𝑀𝐻𝐻𝑟𝑟𝐻𝐻𝐻𝐻𝑠𝑠 𝑢𝑢 . . 1 13
• 5. Base regression results 18
• 6. Robustness 19
• 7. Extensions 23
• 8. Endogeneity checks 27
• 𝛿𝛿 the less likely it is that the 28
• 9. Conclusion 29
• References 31
• Figure 1 Linear relationship between SBM Efficiency and Volatility in Occupancy 36
• Figure 2 Relationship between SBM Efficiency and Volatility in Occupancy by hotel size 37
• Figure 3 Distribution of SBM Efficiency across hotels without sampling weights 38
• Table 1 Heterogeneity with respect to hotel size 39
• 1 2 3 4 39
• Table 2 Alternative efficiency measures 41
• 1 2 3 4 5 41
• Super 41
• Super 41
• BCC 41
• Bias 41
• FDH 41
• Table 3 Number of rooms as the measure of hotel size 43
• 1 2 3 4 43
• Table 4 Non-linear controls 45
• 1 2 3 45
• Table 5 Gendered effects of volatility 47
• 1 2 3 4 47
• Table 6 Use of temporary workers 49
• 1 2 3 4 49
• Table A1 Description of variables 51
• Variable Description 51
• Table A2 Summary statistics 57
• Mean Standard 57
• Minimum Maximum Observations 57
• Table A3 Linear relationship 58
• 1 2 3 4 58
• Table A4 Super efficiency 60
• 1 2 3 4 60
• Table A5 Super efficiency with outliers excluded from the sample 62
• 1 2 3 4 62
• Table A6 BCC model VRS 64
• 1 2 3 4 64
• Table A7 Bias corrected efficiency 66
• 1 2 3 4 66
• Table A8 Free Disposal Hull FDH efficiency 68
• 1 2 3 4 68
• Table A9 Alternative measure of volatility in occupancy 70
• 1 2 3 4 70
• Table A10 Tobit estimation 72
• 1 2 3 4 72
• Table A11 Outlier test based on the slack-based super efficiency measure 74
• 1 2 3 4 74
• Table A12 Scale efficiency linear impact 76
• 1 2 3 4 76
• Table A13 Scale efficiency heterogeneity results 78
• 1 2 3 4 78
• Table A14 All heterogeneities simultaneously 80
• 1 2 3 4 80