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How stable is the tourism-led growth hypothesis in Malaysia? Evidence from disaggregated tourism markets

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  • Tang, Chor Foon
  • Tan, Eu Chye

Abstract

We contribute to the tourism-growth literature by applying the newly developed combined cointegration test and the recursive Granger causality test to re-assess the stability of the tourism-led growth hypothesis in Malaysia with respect to 12 different tourism markets. The cointegration test results suggest that economic growth of Malaysia is cointegrated with all the 12 selected tourism markets. However, the recursive Granger causality test shows that the tourism-led growth hypothesis in Malaysia is valid and stable with respect to tourist arrivals from only 8 out of the 12 tourism markets. Almost all of them are from developed countries. Hence, not all international visitor arrivals could effectively drive the growth of the Malaysian economy. In light of this, tourism marketing policies should focus more on those tourism markets that could significantly stimulate economic growth. However, there should not be total neglect of others as they potentially contribute to the economies of scale.

Suggested Citation

  • Tang, Chor Foon & Tan, Eu Chye, 2013. "How stable is the tourism-led growth hypothesis in Malaysia? Evidence from disaggregated tourism markets," Tourism Management, Elsevier, vol. 37(C), pages 52-57.
    • Handle: RePEc:eee:touman:v:37:y:2013:i:c:p:52-57
    DOI: 10.1016/j.tourman.2012.12.014
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    4. Mohammadzadeh Azam & Shahiki Tash Mohammad Nabi, 2021. "Investigating the Uncertainty of Government Economic Policies on Inbound Tourism in Iran," New Global Studies, De Gruyter, vol. 15(1), pages 85-99, April.
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    6. Bahman Huseynli, 2024. "The Effect of Tourism Revenues and Inflation on Economic Growth in Balkan Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 150-165.
    7. Tang, Chor Foon & Tan, Eu Chye, 2015. "Does tourism effectively stimulate Malaysia's economic growth?," Tourism Management, Elsevier, vol. 46(C), pages 158-163.
    8. Jitendra Sharma & Subrata Kumar Mitra, 2021. "Asymmetric relationship between tourist arrivals and employment," Tourism Economics, , vol. 27(5), pages 952-970, August.
    9. Bakyt Syzdykbayeva & Zhanarys Raimbekov & Darmeniar Khydyrbekuly & Madina Temirbulatova & Almas Bayandinova, 2015. "Research Note: Evaluation and Projection of Economic Indicators of Tourism Development in Kazakhstan," Tourism Economics, , vol. 21(6), pages 1315-1322, December.
    10. Wanjun Xia & Buhari Doğan & Umer Shahzad & Festus Fatai Adedoyin & Abiodun Popoola & Muhammad Adnan Bashir, 2022. "An empirical investigation of tourism-led growth hypothesis in the European countries: evidence from augmented mean group estimator," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(2), pages 239-266, May.
    11. Ştefan-Alexandru CATANA & Sorin-George TOMA, 2021. "Entrepreneurship In The Hospitality Industry. Case Study: Marriott International," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 27, pages 221-225, December.
    12. Velisaria Matzana & Aikaterina Oikonomou & Michael Polemis, 2022. "Tourism Activity as an Engine of Growth: Lessons Learned from the European Union," JRFM, MDPI, vol. 15(4), pages 1-15, April.
    13. Waheed, Rida & Sarwar, Suleman & Dignah, Ashwaq, 2020. "The role of non-oil exports, tourism and renewable energy to achieve sustainable economic growth: What we learn from the experience of Saudi Arabia," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 49-58.
    14. Waheed Ahmad & Tariq Majeed & Zubaria Andlib, 2020. "Tourism Led Growth Hypothesis: Empirical Evidence From Five South Asian Countries," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(1), pages 51-59, March.
    15. Jun Zhang & Li Cheng, 2019. "Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China," Sustainability, MDPI, vol. 11(2), pages 1-22, January.
    16. Shahbaz, Muhammad & Ferrer, Román & Hussain Shahzad, Syed Jawad & Haouas, Ilham, 2017. "Is the tourism-economic growth nexus time-varying? Bootstrap rolling-window causality analysis for the top ten tourist destinations," MPRA Paper 82713, University Library of Munich, Germany, revised 04 Nov 2017.
    17. Sadia Bano & Mehtab Alam & Anwar Khan & Lu Liu, 2021. "The nexus of tourism, renewable energy, income, and environmental quality: an empirical analysis of Pakistan," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(10), pages 14854-14877, October.
    18. Azam, Muhammad & Alam, Md. Mahmudul & Hafeez, Muhammad Haroon, 2019. "Tourism and environmental quality nexus: Further evidence from Malaysia, Singapore and Thailand," SocArXiv 6ze5m, Center for Open Science.
    19. Webster, Craig & Ivanov, Stanislav, 2014. "Transforming competitiveness into economic benefits: Does tourism stimulate economic growth in more competitive destinations?," Tourism Management, Elsevier, vol. 40(C), pages 137-140.
    20. Bright Akwasi Gyamfi & Murad A Bein & Festus Fatai Adedoyin & Festus Victor Bekun, 2022. "How does energy investment affect the energy utilization-growth-tourism nexus? Evidence from E7 Countries," Energy & Environment, , vol. 33(2), pages 354-376, March.
    21. Tugcu, Can Tansel, 2014. "Tourism and economic growth nexus revisited: A panel causality analysis for the case of the Mediterranean Region," Tourism Management, Elsevier, vol. 42(C), pages 207-212.

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    More about this item

    Keywords

    Combined cointegration test; Tourism-led growth hypothesis; Recursive causality; Malaysia;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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