Does an optimal firm size exist for publicly traded US hotels?

This study examines whether or not there is an optimal firm size for publicly traded US hotels. More specifically, the study tests a threestage relationship based on economies and diseconomies of scale: The first stage, in which firm value increases as firm size increases; the second stage, in which firm value remains constant as firm size increases beyond the first stage; and the third stage, in which firm value decreases as firm size transcends the second stage. The study uses the Newey-West heteroskedasticity and the autocorrelation consistent (HAC) standard errors estimation in pooled regression analysis. Findings partially support the proposed relationship.