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Drivers of Growth in the Travel and Tourism Industry in Malaysia: A Geweke Causality Analysis

Author

Listed:
  • Tan Khee Giap

    () (Asia Competitiveness Institute, Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore 259770, Singapore)

  • Sasidaran Gopalan

    () (Asia Competitiveness Institute, Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore 259770, Singapore)

  • Ye Ye

    () (Asia Competitiveness Institute, Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore 259770, Singapore)

Abstract

The travel and tourism industry has been growing in importance for several developing countries. It has not only generated considerable foreign exchange revenues but has also contributed to the overall output and socio-economic development of these countries. Within the Asia and Pacific region, data for 2014 indicates that Malaysia was ranked very highly at no. 26 out of the 184 countries in the world in terms of the relative importance of the contribution of the travel and tourism industry to its national output. In this light, this paper aims to undertake an empirical examination of the factors driving international tourist arrivals into Malaysia. The paper attempts to identify the causal determinants of the growth of the travel and tourism industry, using quarterly data from 2000 to 2012, under a Geweke causality framework. The empirical results suggest Malaysia’s government expenditures on tourism promotion as well as infrastructure investments such as enhancing airport facilities are causal and significant determinants of growth in the travel and tourism industry.

Suggested Citation

  • Tan Khee Giap & Sasidaran Gopalan & Ye Ye, 2016. "Drivers of Growth in the Travel and Tourism Industry in Malaysia: A Geweke Causality Analysis," Economies, MDPI, Open Access Journal, vol. 4(1), pages 1-15, February.
  • Handle: RePEc:gam:jecomi:v:4:y:2016:i:1:p:3-:d:64547
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    References listed on IDEAS

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    1. Calderon, Cesar & Liu, Lin, 2003. "The direction of causality between financial development and economic growth," Journal of Development Economics, Elsevier, vol. 72(1), pages 321-334, October.
    2. Nanthakumar, Loganathan & Ibrahim, Yahaya & Harun, Madzli, 2007. "Tourism Development Policy, Strategic Alliances and Impact of Consumer Price Index on Tourist Arrivals: The Case of Malaysia," MPRA Paper 25376, University Library of Munich, Germany, revised 24 Nov 2007.
    3. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    4. A. Özlem Önder & Aykan Candemir & Neşe Kumral, 2009. "An Empirical Analysis of the Determinants of International Tourism Demand: The Case of Izmir," European Planning Studies, Taylor & Francis Journals, vol. 17(10), pages 1525-1533, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Hasan Agha Muhanad & Elena B. Gafforova, 2019. "Strategic entrepreneurship: A management method for improving the performance of small and medium-sized tourism enterprises (SMTEs)," Upravlenets, Ural State University of Economics, vol. 10(3), pages 25-35, July.

    More about this item

    Keywords

    Geweke causality; economic growth; travel and tourism; Malaysia; competitiveness;

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • F - International Economics
    • I - Health, Education, and Welfare
    • J - Labor and Demographic Economics
    • O - Economic Development, Innovation, Technological Change, and Growth
    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

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