*7.2. Other Explanatory Variables (H4 and H5)*

A fall in the Norwegian currency rate contributed to increased visits by foreigners. It is therefore no surprise that this caused increased growth in the camping sector. However, this does not apply to campsites with more than 25 employees. One possible explanation is that the large companies have such a diversified portfolio of activities that they are less vulnerable to the inflow of foreign visitors. They may also have a supply that has a more inelastic demand regarding fluctuations in the exchange rate. Large enterprises may also adjust prices to compensate for changes in demand due to such exchange rate fluctuations. Alternatively, foreign visitors could be visiting small- and medium-sized campsites disproportionately more than they visit large campsites. Either way, H4 is rejected in favour of a deprecation leading to higher revenue, except for the large campsites, whereas small campsites are more sensitive to the exchange rate than medium-sized campsites. A weaker Norwegian currency increases growth in the camping sector.

As for H5: A 1% increase in the level of debt in one year is estimated to translate into a 0.08% increase in the revenue in the same year for the entire sample, when controlling for the other variables. Although this effect may seem small, it must be remembered that we have controlled for the previous year's revenue, and debt levels might be expected to work on a larger timescale and/or with a certain time-lag. Even then, the results are telling, especially when looking at the sub-samples. In essence, the larger the campsite is, the more significant the level of debt is in explaining its level of growth. This indicates that larger campsites are more successful in turning investments into revenue than smaller campsites, which can either be due to smaller campsites being less experienced in carrying out projects, or that their investments fall through more often due to their sensitivity to market forces or consumer tastes.
