The impact of localized innovations on the stock returns of tourism companies

Abstract

The aim of this study was to determine the role of source of innovation, its degree of novelty, and their interaction in shaping tourism companies' stock returns in different geographical contexts. The research employed the buy-and-hold method. It included 378 innovation announcements released in the years 2011–2016 for 111 tourism companies operating in European Union countries. Findings suggest that abnormal returns for the companies listed in the innovation leading countries were significantly smaller than those for the moderate innovators group. The study proposes a novel, geographical perspective to the analysis of the effects of innovation on stock returns in tourism.