Event Title
Parallel Session 34, Mega Events & Music Festivals Track: Holiday Effects on the Stock Price of the Amusement Park and Attractions Industry in the United States
Location
Classroom 205
Start Date
14-12-2017 5:15 PM
End Date
14-12-2017 5:40 PM
Description
Purpose
Since Fama (1970) proposed the Efficient Markets Hypothesis (EMH), many related research studies have been widely conducted. However, behavioral finance scholars have not agreed because EHM cannot completely explain the holiday effects/ calendar effect such as Monday effect, January effect, and so on. Therefore, according to the theory of behavior finance, the purpose of this study is to examine the abnormal returns and volatilities in the amusement park ad attractions industry before and after the holiday in the United States. This study not only offers further evidence of the holiday effects on the stock price with a higher excess return and volatility, but also presents additional and different perspectives on the holiday effect phenomenon in the amusement park and attractions industry in the United States.
Design/methodology/approach
In order to fill the gap of the Efficient Market Hypothesis (EMH) that cannot explain an abnormal phenomenon, the study employs the theory of behavioral finance to explain the "holiday effects" because the calendar effect plays a vital role both in behavioral finance and in the amusement parks and attractions industry. This study follows the methodology from Corhay and Rad (1994). Thus, the GARCH model is adopted with a dummy variable as a proxy of holiday event to examine whether the holiday effect exists, including pre-holiday and post-holiday. The holidays include New Year's Day, Mother's Day, Father's Day, Thanksgiving Day, Christmas Day, and so on. In addition, this study separates the holidays to identify which category of holiday has a greater impact on abnormal returns and volatilities in the amusement park and attractions industry in the United States. All companies in this study are publicly traded companies and belong to the amusement parks and attractions industry.
Findings
There is an 11.39% significant effect for abnormal return rates and 22.22% significant effect for abnormal volatility rate, including pre-holidays and post-holidays. This indicates that abnormal volatility rate is higher than abnormal return for the holiday effects. In addition, there is a 5.83% positive and significant effect while 5.56% negative and significant impact. Both of these rates are not high. However, for abnormal volatility, there is no positive and significant effect but there is a 22.22% negative and significant effect, which means all significant abnormal volatilities are negative. For the abnormal returns, there is an 8.33% significant rate for pre-holiday but post-holiday receives 14.44%. This implies that the abnormal return rate that exists in post-holidays is higher than the rate in pre-holiday. However, for the abnormal volatilities, pre-holiday accounts for 37.22% while post-holiday has 7.22%. This indicates that the abnormal volatility rate occurs in pre-holiday is way higher than the rate in post-holiday.
Research limitations/implications
There are some limitations in this study. The companies that this study adopts are all publicly traded companies. The number of the publicly traded companies in the amusement parks and attractions industry is less than the number of publicly traded firms in other industries. Therefore, the sample of data collection in the amusement parks and attractions is not that big. Moreover, this study focuses on the holiday impacts on the stock price of the amusement parks and attractions industry and to determine whether different holidays can have different effects on the businesses of the amusement parks and attractions. However, this study does not consider whether different scales of companies with different revenue growth and financial situations. For the research implications, this study reveals that the "calendar effects" happen, which means that stock returns and volatilities can predicted for certain days of the week, days of the month, or certain holidays of the year. In addition, this study examines the theory of behavioral finance; behavioral finance can bridge the knowledge gap left by the traditional financial and economic theory such as Efficient Market Hypothesis (EMH) that cannot explain an abnormal phenomenon in the stock market.
Practical implications
This study contributes to both academia and industry. For the academia, this study can be examined by the theory of behavioral finance and can explain the holiday effects for amusement parks and attractions industry. The findings of this study also have crucial managerial implications in the industry because more people now take their days off than in the past. People realize leisure and recreation can enhance their quality of life. Therefore, taking part in leisure activities such as going to amusement parks or attractions is part of people's lives, especially in holidays with their family and children. Hence, it is important to examine what extent and how holiday effect phenomenon has an impact on the amusement parks and attractions industry. Additionally, through this study, these amusement parks companies can develop better marketing strategies and adjust business models for the specific dates to maximize their sales and also increase profits. Furthermore, this study can benefit the shareholders of these amusement park companies because investors can determine the time to purchase or sell the stocks to earn money.
Originality/value
The examination of the holiday impacts on amusement parks and attractions is a novel idea because for the companies, they can realize what extent or how the holidays can bring the maximization of revenues and for the investors, they can know the right time to buy or sell their stocks for maximizing their personal financial management. This study also provides a new and different insight into the entertainment industry through holiday effects/ events. More complete contents with details be discussed in the full paper. The figures, tables, and recommendations will be presented in the full paper as well.
Parallel Session 34, Mega Events & Music Festivals Track: Holiday Effects on the Stock Price of the Amusement Park and Attractions Industry in the United States
Classroom 205
Purpose
Since Fama (1970) proposed the Efficient Markets Hypothesis (EMH), many related research studies have been widely conducted. However, behavioral finance scholars have not agreed because EHM cannot completely explain the holiday effects/ calendar effect such as Monday effect, January effect, and so on. Therefore, according to the theory of behavior finance, the purpose of this study is to examine the abnormal returns and volatilities in the amusement park ad attractions industry before and after the holiday in the United States. This study not only offers further evidence of the holiday effects on the stock price with a higher excess return and volatility, but also presents additional and different perspectives on the holiday effect phenomenon in the amusement park and attractions industry in the United States.
Design/methodology/approach
In order to fill the gap of the Efficient Market Hypothesis (EMH) that cannot explain an abnormal phenomenon, the study employs the theory of behavioral finance to explain the "holiday effects" because the calendar effect plays a vital role both in behavioral finance and in the amusement parks and attractions industry. This study follows the methodology from Corhay and Rad (1994). Thus, the GARCH model is adopted with a dummy variable as a proxy of holiday event to examine whether the holiday effect exists, including pre-holiday and post-holiday. The holidays include New Year's Day, Mother's Day, Father's Day, Thanksgiving Day, Christmas Day, and so on. In addition, this study separates the holidays to identify which category of holiday has a greater impact on abnormal returns and volatilities in the amusement park and attractions industry in the United States. All companies in this study are publicly traded companies and belong to the amusement parks and attractions industry.
Findings
There is an 11.39% significant effect for abnormal return rates and 22.22% significant effect for abnormal volatility rate, including pre-holidays and post-holidays. This indicates that abnormal volatility rate is higher than abnormal return for the holiday effects. In addition, there is a 5.83% positive and significant effect while 5.56% negative and significant impact. Both of these rates are not high. However, for abnormal volatility, there is no positive and significant effect but there is a 22.22% negative and significant effect, which means all significant abnormal volatilities are negative. For the abnormal returns, there is an 8.33% significant rate for pre-holiday but post-holiday receives 14.44%. This implies that the abnormal return rate that exists in post-holidays is higher than the rate in pre-holiday. However, for the abnormal volatilities, pre-holiday accounts for 37.22% while post-holiday has 7.22%. This indicates that the abnormal volatility rate occurs in pre-holiday is way higher than the rate in post-holiday.
Research limitations/implications
There are some limitations in this study. The companies that this study adopts are all publicly traded companies. The number of the publicly traded companies in the amusement parks and attractions industry is less than the number of publicly traded firms in other industries. Therefore, the sample of data collection in the amusement parks and attractions is not that big. Moreover, this study focuses on the holiday impacts on the stock price of the amusement parks and attractions industry and to determine whether different holidays can have different effects on the businesses of the amusement parks and attractions. However, this study does not consider whether different scales of companies with different revenue growth and financial situations. For the research implications, this study reveals that the "calendar effects" happen, which means that stock returns and volatilities can predicted for certain days of the week, days of the month, or certain holidays of the year. In addition, this study examines the theory of behavioral finance; behavioral finance can bridge the knowledge gap left by the traditional financial and economic theory such as Efficient Market Hypothesis (EMH) that cannot explain an abnormal phenomenon in the stock market.
Practical implications
This study contributes to both academia and industry. For the academia, this study can be examined by the theory of behavioral finance and can explain the holiday effects for amusement parks and attractions industry. The findings of this study also have crucial managerial implications in the industry because more people now take their days off than in the past. People realize leisure and recreation can enhance their quality of life. Therefore, taking part in leisure activities such as going to amusement parks or attractions is part of people's lives, especially in holidays with their family and children. Hence, it is important to examine what extent and how holiday effect phenomenon has an impact on the amusement parks and attractions industry. Additionally, through this study, these amusement parks companies can develop better marketing strategies and adjust business models for the specific dates to maximize their sales and also increase profits. Furthermore, this study can benefit the shareholders of these amusement park companies because investors can determine the time to purchase or sell the stocks to earn money.
Originality/value
The examination of the holiday impacts on amusement parks and attractions is a novel idea because for the companies, they can realize what extent or how the holidays can bring the maximization of revenues and for the investors, they can know the right time to buy or sell their stocks for maximizing their personal financial management. This study also provides a new and different insight into the entertainment industry through holiday effects/ events. More complete contents with details be discussed in the full paper. The figures, tables, and recommendations will be presented in the full paper as well.
