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Tourism and Openness to Trade in Singapore: Evidence Using Aggregate and Country-Level Data

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  • Koi Nyen Wong
  • Tuck Cheong Tang

Abstract

Tourism has been identified as one of the key growth sectors in Singapore's economy. Given that the city state has been recognized as one of the most open economies in the world, this study explores the causality relationships between tourism and openness to trade, using aggregated variables – total visitor arrivals and data on trade components (merchandise and services) – and their respective disaggregated data by country for each of Singapore's top five trading partners – Malaysia, China, the USA, Japan and South Korea. The study shows bidirectional causality between international visitor arrivals in Singapore and openness to merchandise trade. However, the causality pattern varies among Singapore's major trading partners if country-level data are used. The overall findings imply that further trade liberalization with Singapore's major trading partners may not necessarily encourage visitor arrivals from those countries, but can be seen as an important catalyst for the growth and development of the tourism sector. Conversely, an increase in tourism activities could also encourage the host country to open itself to more international trade. Furthermore, it is imperative to liberalize the service sector in Singapore to facilitate greater openness in merchandise trade, given that a large proportion of services constitutes the goods trade.

Suggested Citation

  • Koi Nyen Wong & Tuck Cheong Tang, 2010. "Tourism and Openness to Trade in Singapore: Evidence Using Aggregate and Country-Level Data," Tourism Economics, , vol. 16(4), pages 965-980, December.
    • Handle: RePEc:sae:toueco:v:16:y:2010:i:4:p:965-980
    DOI: 10.5367/te.2010.0017
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    References listed on IDEAS

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    2. Puah, Chin-Hong & Huan, Suk-Hie & Thien, Fung-Thai, 2018. "Determinants of Chinese demand for tourism in Malaysia," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 14(3), May.
    3. Farah Siddiqui & Danish Ahmed Siddiqui, 2019. "Causality between Tourism and Foreign Direct Investment: An Empirical Evidence from Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 7(1), pages 27-44, March.
    4. Zahed Ghaderi & Behnaz Saboori & Mana Khoshkam, 2023. "Revisiting the Environmental Kuznets Curve Hypothesis in the MENA Region: The Roles of International Tourist Arrivals, Energy Consumption and Trade Openness," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    5. Muntasir Murshed & Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Suvajit Banerjee, 2020. "Calibrating the Impacts of Regional Trade Integration and Renewable Energy Transition on the Sustainability of International Inbound Tourism Demand in South Asia," Sustainability, MDPI, vol. 12(20), pages 1-17, October.
    6. Melville Saayman & Andrea Saayman, 2012. "Shopping Tourism or Tourists Shopping? A Case Study of South Africa's African Tourism Market," Tourism Economics, , vol. 18(6), pages 1313-1329, December.

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