This study examines the nonlinear, threshold-dependent relationship between financial leverage and firm performance in publicly traded tourism firms in Turkey, and investigates how this relationship has evolved under post-COVID-19 multi-shock conditions. The main aim of the research is to identify the thresholds at which borrowing becomes a source of financial vulnerability and to analyse how this process deepens under macroeconomic shocks. For this purpose, quarterly panel data covering the period from Q1 2012 to Q1 2025 for 22 tourism firms listed on Borsa Istanbul were used. Firm performance was measured through accounting-based indicators Return on Asset(ROA) and Return on Equity(ROE), and a market-based indicator (stock returns). In the empirical analysis, both the random-effects panel regression model and the endogenous-threshold panel regression methods were applied. The findings indicate that the relationship between financial leverage and performance is nonlinear, and a significant regime change occurs when the leverage ratio exceeds approximately 60–70%. In the post-COVID-19 period, both accounting-based and market-based performance indicators under high-leverage regimes became more sensitive to financial vulnerability. Additionally, the effects of the real effective exchange rate and the service sector price index on firm performance have strengthened in the post-crisis period. The study reveals that financial fragility in the tourism sector is a structural feature sensitive to thresholds and crisis regimes rather than temporary shocks. In this regard, the research highlights the limits of debt-based growth strategies and contributes to early warning mechanisms for policymakers, investors, and firm managers.
Yeşim Helhel (Mon,) studied this question.