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THE EFFECTS OF TECHNICAL PROGRESS ON ITALIAN TOURISM COMPANIES

THE EFFECTS OF TECHNICAL PROGRESS ON ITALIAN TOURISM COMPANIES
Dawid Szutowski,, докторант

Poznań University of Economics, Польша

Участник конференции

Purpose
 The purpose of present research was to determine the effects of technical progress on the value of Italian tourism companies.

Design/methodology/approach
 The research was performed on the data from three tourism companies listed on the BorsaItaliana – Autogrill, GrandiViaggi, and Snai. The research relied on publicly available data on technical progress retrieved from ProQuest database. The effects of the technical advancement were measured using the event-study method. All the data on the asset prices was retrieved from the stock exchange’s database.

Findings 
The research indicates that on average the implementation of any kind of technical advancement augments the company’s market value by 1% within the 21 days surrounding the release of the information to the market. However, the results were strongly differenciated among the different types of technical advencement projects.

Research limitations The main limitation is that, the research covered only the technical advancement projects from one country.

Originality/value 
The paper fulfils the knowledge gap concerning the results of the technical progress in tourism enterprises.

Keywords: tourism enterprise, technical progress

 

Introduction

Technical progress is usually attributed to such business fields as electronics, aviation, pharmaceuticals etc. However a significant portion of the technical progress is produced also in the low-tech industries.

Lundvall [2010] in his extensive work on technical progress and innovation distinguishes incremental and breakthrough technical changes. He indicates that the substantial part of the incremental progress originates form the routine actions. In such approach, the every-day operations, and the minority upgrades are more important than the formal R&D (at the same time, that the breakthrough advancements are more likely to occur in specialised research centres). Furthermore, the routine every-day actions occur in both high-tech, and low-tech industries, and therefore the chances for minor upgrades are virtually the same in both.

Tourism is the low-tech industry. However, it has a crucial role in the economy of the European Union [WTTC 2014]. It contributes to both – GDP and employment [Ernst & Young 2013].

In order to study the effects of the technical progress of tourism enterprises the event-study method was employed. The results indicate, that the technical advancement causes the market vaue to increase on average by 1%.

The paper is organised as follows. First the tourism enterprises are deffined. Second, the method is presented. Third, the results of the empirical investogation are delivered. Fourth, the discussion and conclusions are delivered.

Tourism enterprise

In the research, the deffinition of tourism enterprises was retrieved from the United Nations World Tourism Organisation. Accorting to UNWTO tourism enterprises include: accommodation for visitors, food and beverage servicing activities, passenger transportation, and travel agencies and other reservation activities [UNWTO 2010]. However, the distinction may be problematic, if a company manages different activities. In such case, an enterprise is classified as tourism, if more than a half of the value added is generated by the tourism characteristic activity [UNWTO 2010].

Method

The purpose of present research was to determine the effects of technical progress on the value of Italian tourism companies. The spacial scope encompassed Italy. The research focused on tourism enterprises listed on the main market of Borsa Italiana. The data on technical progress was retrieved from the ProQuest database. In the studied period three different types of technical progress were identified:

  • 1.  Advancement in the equipment used directly to provide services to customers.
  • 2.  Advancement in the machinery used in the internal companies’ processes.
  • 3. Implementation of the web technologies.

The effects of the technical advancement projects were measured using the event-study method [Campbell, Lo, MacKinlay 1997; McWilliams, A. &Siegel 1997]. The changes in market value resulting from the technical change were measured in the short-term due to the assumption on market efficiency [Fama 1970]. The abnormal returns were calculated as the difference between the actual ones, and the ones calculated using the Fama & French three-factor model. In the preliminary research on the effects of innovation [Szutowski 2014] it was ascertained that the most recognisable abnormal returns occur in the period of 21 days surrounding the event. Therefore in present study such period was employed.

Results

The results indicate, that the cumulated gain in the market value resulting from the technical progress projects managed by tourism enterprises equals 1%. The distribution of the abnormal returns over the period of 21 days is presented on the graph 1.

Graph 1. Abnormal returns due to the technical progress by tourism enterprises

Source: own development

As it may be seen, the highest gain in market value may be observed few days after the information of the technological project is announced. It may be due to the fact, that the technical progress may require some time to be acknowledged by the market (probably – the more complicated the project, the more time is required for investors to acknowledge it).

Three types of technical progress were identified:advancement in the equipment used directly to provide services to customers, advancement in the machinery used in the internal companies’ processes, and implementation of the web technologies. The results of the technical progress in all thre fields was strongly diversified. The precise data is presented on the graph 2.

Graph 2. The abnormal returns resulting from different types of technical progress

Source: own development

The abnormal returns are strongly differentiated among the different types of technical advancement. The most profitable for the tourism enterprises is to invest in technologies that improve processes. The less profitable technological improvements are the ones focusing on customers.

Conclusions

Technical advancement is of key importance for the development of firms. It is usually associated with high-tech industries, but the low-tech ones also play an important role. The good examples are the tourism enterprises.

The research was performed on the Italian tourism enterprises, listed on BorsaItaliana. The data on technical progress was retrieved from the ProQuest database. The technical advancement projects were divided into three groups: advancement in the equipment used directly to provide services to customers, advancement in the machinery used in the internal companies’ processes, and implementation of the web technologies.

The results indicate that the projects focusing on technical change increase the market value for 1%. The most profitable for the tourism companies are the technologies, which improve the internal processes. This may be due to the fact, that theprofits in their case do not depend on the market reaction (customers reaction) and bring less uncertainty.

The further research should expand to the other markets. Also it seems beneficial to augment the sample in order to extract more types of technical advancement and generalise the results.

References:

  • 1. Ernst & Young, 2013, The Hospitality Sector in Europe.An assessment of the economic contribution of the hospitality sector across 31 countries, http://www.brewersofeurope.org/docs/publications/2013/the_hospitality_sector_in_EU_09-2013_ld_v2.pdf(01.12.2014).
  • 2.  UNWTO, 2010,  International Recommendations for Tourism Statistics 2008, Studies in Methods, Series M, No. 83/Rev. 1, New York.
  • 3. WTTC – World Travel and Tourism Council, 2014, Travel and Tourism. Economic Impact 2014. World, http://www.wttc.org/site_media/uploads/downloads/world2014.pdf (1.1.2015).
  • 4.  Lundvall, B. (ed.), 2010, National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning, Anthem Press, London-New York.
  • 5. Campbell, J., Lo, A., MacKinlay, C., 1997, The Econometrics of Financial Markets, PrincetonUniversity Press, New Jersey.
  • 6. McWilliams, A.,Siegel, D, 1997, EventStudies in Management Research: Theoretical and EmpiricalIssues, Academy of Management Journal, vol. 40, no. 3, pp. 626–657.
  • 7.  Fama, E., 1970, Efficientcapitalmarkets: a review of theory and empiricalwork, Journal of Finance, vol. 25, no. 2, pp. 383–417.
  • 8. Szutowski, D., 2014, Endogeniczne determinanty wpływu innowacji na wartość rynkową przedsiębiorstw turystycznych, Folia turistica, no. 32, pp. 175-194.
Комментарии: 2

Таратин Вячеслав Викторович

Уважаемый Давид! Работа интересная. Все мы потенцалные туристы. Италия это "золотой Клондайк" для туристических компаний. Ваша работа информативна и заслуживает внимания специалистов. котоые занимаются туристическим бизнесом. Только, как она сочетается с названием секции "Техничские науки..."? Желаю дальнейших успехов. С уважением к.т.н., доц. Таратин Вячеслав Викторович

Трещалин Михаил Юрьевич

Уважаемый Давид! Сфера Вашего исследования безусловно очень актуальна в наше время и не только для Италии. Полностью согласен, что наиболее эффективно вкладывать средства в развитие внутренних технологических процессов. В этом случае себестоимость возрастает не существенно. Полагаю, что детальный анализ каждого из приведенных Вами типов технологий, может быть полезен для дальнейшего развития туристического бизнеса. С уважением д.т.н., профессор М.Ю. Трещалин
Комментарии: 2

Таратин Вячеслав Викторович

Уважаемый Давид! Работа интересная. Все мы потенцалные туристы. Италия это "золотой Клондайк" для туристических компаний. Ваша работа информативна и заслуживает внимания специалистов. котоые занимаются туристическим бизнесом. Только, как она сочетается с названием секции "Техничские науки..."? Желаю дальнейших успехов. С уважением к.т.н., доц. Таратин Вячеслав Викторович

Трещалин Михаил Юрьевич

Уважаемый Давид! Сфера Вашего исследования безусловно очень актуальна в наше время и не только для Италии. Полностью согласен, что наиболее эффективно вкладывать средства в развитие внутренних технологических процессов. В этом случае себестоимость возрастает не существенно. Полагаю, что детальный анализ каждого из приведенных Вами типов технологий, может быть полезен для дальнейшего развития туристического бизнеса. С уважением д.т.н., профессор М.Ю. Трещалин
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