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Does Tourism Predict Macroeconomic Performance in Pacific Island Countries?

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Author Info

  • Paresh Kumar Narayan

    ()
    (Deakin University)

  • Susan S Sharma

    ()
    (Deakin University)

  • Deepa Bannigidadmath

    (Deakin University)

Abstract

In this paper we examine whether tourism predicts macroeconomic variables in Pacific Island countries (PICs), namely, Fiji, the Solomon Islands, PNG, Vanuatu, Samoa, and Tonga. We form seven panels of PICs—one full panel of six countries and six panels where, one-by-one, each country is excluded from the panel. We apply the Westerlund and Narayan (2012a) panel regression framework, where the null hypothesis is that visitor arrivals do not predict macroeconomic variables, which we proxy with 11 indicators, for panels of countries. We find that visitor arrivals consistently predict exports and money supply, and to a lesser extent, exchange rates and GDP.

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Bibliographic Info

Paper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Financial Econometics Series with number 2013_03.

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Length: 27
Date of creation:
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Publication status: Published
Handle: RePEc:dkn:ecomet:fe_2013_03

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Related research

Keywords: Tourism; Macroeconomic variables; GDP; Money Supply; Panel Data; Predictive Regression Model.;

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References

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  7. Westerlund, Joakim & Narayan, Paresh Kumar, 2012. "Does the choice of estimator matter when forecasting returns?," Journal of Banking & Finance, Elsevier, vol. 36(9), pages 2632-2640.
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  16. Bichaka Fayissa & Christian Nsiah & Badassa Tadasse, 2007. "The Impact of Tourism on Economic Growth and Development in Africa," Working Papers 200716, Middle Tennessee State University, Department of Economics and Finance.
  17. Reinhart, Carmen & Rogoff, Kenneth, 2004. "The modern history of exchange rate arrangements: A reinterpretation," MPRA Paper 14070, University Library of Munich, Germany.
  18. Lokman Gunduz & Abdulnasser Hatemi-J, 2005. "Is the tourism-led growth hypothesis valid for Turkey?," Applied Economics Letters, Taylor & Francis Journals, vol. 12(8), pages 499-504.
  19. Juan Luis Eugenio-Martín & Noelia Martín Morales & Riccardo Scarpa, 2004. "Tourism and Economic Growth in Latin American Countries: A Panel Data Approach," Working Papers 2004.26, Fondazione Eni Enrico Mattei.
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