It is often argued that small firms are more flexible than large firms. As a result, small firms perform better in volatile markets compared to large firms. The present paper explores this idea for a representative sample of private hotels in Malaysia. Specifically, the paper estimates the impact of volatility in occupancy rates on the pure technical efficiency of small versus large hotels. A slack-based non-radial efficiency measure obtained from the data envelopment analysis methodology is used. The empirical results confirm that smaller hotels are better at dealing with volatility than large hotels are. That is, there is a positive and significant impact of higher volatility on the efficiency of relatively small hotels, a negative and significant impact on the efficiency of larger hotels, and no significant impact on the efficiency of the average hotel. Higher women's ownership also helps hotels to deal with volatility. The paper discusses the policy implications of the findings.
Authors
- DOI
- https://dx.doi.org/10.1596/1813-9450-10953
- Disclosure Date
- 2024/10/22
- Disclosure Status
- Disclosed
- Doc Name
- The Impact of Market Volatility on Hotel Efficiency in Malaysia : Does Hotel Size Matter ?
- Originating Unit
- Off of Sr VP Dev Econ/Chief Econ (DECVP)
- Pages
- 81
- Published in
- United States of America
- Series Name
- Policy Research working paper; PROSPERITY;
- Unit Owning
- Enterprise Analysis-WB (DECEA)
- Version Type
- Final
- Volume No
- 1
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
- ππ ππππππ ππ π π π π 1 1 ππ π π 11
- π₯π₯ π₯π₯ ππ 11
- π π ππ 1 . . ππ 11
- π¦π¦ π¦π¦ ππ 11
- π π ππ 1 . . π π 11
- 1 ππ 0 ππ π π 0 ππ π π 0 ππ 11
- π π and π π 11
- 4. Data source and main variables 13
- πΈπΈπΈπΈπΈπΈπππΈπΈπππΈπΈπππΈπΈπ¦π¦ πΌπΌ π½π½ ππ π»π»π»π»π»π»πΈπΈπ»π» π π πππ π πΈπΈ π½π½ ππ π½π½ π»π»π»π»π»π»πΈπΈπ»π» π π πππ π πΈπΈ 13
- π π πΈπΈπ π πππ»π»ππ πΈπΈπππ₯π₯πΈπΈππ πΈπΈπΈπΈπΈπΈπΈπΈπΈπΈπ»π»π π π΅π΅π΅π΅π π πΈπΈπ»π»πππππΈπΈ πΆπΆπ»π»πππ»π»πππ»π»π»π»π π π’π’ . . 1 13
- 5. Base regression results 18
- 6. Robustness 19
- 7. Extensions 23
- 8. Endogeneity checks 27
- πΏπΏ 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
