Investment inefficiency in the hospitality industry: The role of economic policy uncertainty

Conrado Diego García-Gómez*, Ender Demir, José María Díez-Esteban, Boris Popesko

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Corporate investment inefficiency in the hospitality industry is an understudied topic. In this paper, we examine the effect of Economic Policy Uncertainty (EPU) on the investment inefficiency of a sample of 213 hospitality firms in the U.S. for the period 2010–2019. The results reveal that a rise in economic policy uncertainty leads to an increase in firm-level investment inefficiency in the hospitality industry. The underinvestment and the overinvestment problems are exacerbated by uncertainty. The results are robust for different variables specification and econometric techniques. Policy implications are also provided.

Original languageEnglish
Pages (from-to)383-391
Number of pages9
JournalJournal of Hospitality and Tourism Management
Publication statusPublished - Mar 2023

Bibliographical note

Funding Information:
This research has been financed by Spanish Public Funds through the Ministry of Science and Innovation in the framework of the project PID2020-114797GB-I00 . All the remaining errors are our responsibility.

Publisher Copyright:
© 2023 The Authors

Other keywords

  • Economic policy uncertainty
  • Hospitality firms
  • Investment inefficiency
  • Overinvestment
  • Underinvestment


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