6. Regression Analysis with Dummy Variables: Innovation and Firm Performance in the Tourism Industry

The chapter demonstrates an application of correlation and regression analysis in tourism research. The chapter provides the concepts of product moment correlation, partial and part correlation, regression, and regression with dummy variables. The chapter provides, in particular, an application of regression analysis with dummy variables to estimate the economic effects of innovation on firm financial performance in the tourism industry of an economy in Asia. The paper examines signs and significance of the relationship between technological innovation and firm financial performance in the tourism industry of Thailand. The study employs multiple regression analysis with dummy variables, correlation analysis (i.e., the Pearson correlation), and chi-square tests (i.e., the Pearson chi-square test), and the associated statistics are explained. The dataset includes a total of 188 data points from 46 listed firms in tourism in the Stock Exchange of Thailand over a period of five fiscal years, 2011–2015.