IDEAS home Printed from https://ideas.repec.org/a/spt/apfiba/v15y2025i5f15_5_1.html

The Impact of COVID-19 on Taiwan’s Tourism Industry and Its Economic Linkages: An Input–Output Analysis

Author

Listed:
  • Cheng-Wen Lee
  • Kuei-Chiang Chen

Abstract

The COVID-19 pandemic has profoundly disrupted global tourism, with Taiwan’s tourism industry experiencing unprecedented challenges due to international travel bans and strict domestic containment measures. This study examines the impact of COVID-19 on Taiwan’s tourism sector and its economic linkages using input–output (I–O) analysis. The I–O framework, adjusted through the RAS method, enables the estimation of sectoral interdependencies and multiplier effects across the Taiwanese economy from 2016 to 2019. Tourism-related industries—specifically wholesale and retail, accommodation and dining, transportation services, and entertainment—are evaluated in terms of backward and forward correlation effects, total industry linkages, and standardized measures of influence and sensitivity. The findings reveal that Taiwan’s tourism-related industries occupy a relatively modest position in the national economic structure, with weaker forward linkages that limit their capacity to serve as foundational suppliers for other industries. Retail and accommodation rank low in both forward and backward effects, while transportation and entertainment demonstrate moderate backward linkages, reflecting their role in stimulating upstream industries. The construction sector, though not directly categorized as tourism, exhibits the strongest backward correlation, underscoring its role as a complementary driver amplified by tourism development. The results highlight the vulnerability of Taiwan’s tourism sector to external shocks yet affirm its potential to stimulate complementary industries. Policy implications emphasize the need for resilience-building, diversification, and alignment of tourism strategies with broader industrial development goals. JEL classification numbers: C67, E01, O53, Z32.

Suggested Citation

  • Cheng-Wen Lee & Kuei-Chiang Chen, 2025. "The Impact of COVID-19 on Taiwan’s Tourism Industry and Its Economic Linkages: An Input–Output Analysis," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 15(5), pages 1-1.
    • Handle: RePEc:spt:apfiba:v:15:y:2025:i:5:f:15_5_1
    as

    Download full text from publisher

    File URL: http://www.scienpress.com/Upload/JAFB%2fVol%2015_5_1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Solomon Hsiang & Daniel Allen & Sébastien Annan-Phan & Kendon Bell & Ian Bolliger & Trinetta Chong & Hannah Druckenmiller & Luna Yue Huang & Andrew Hultgren & Emma Krasovich & Peiley Lau & Jaecheol Le, 2020. "The effect of large-scale anti-contagion policies on the COVID-19 pandemic," Nature, Nature, vol. 584(7820), pages 262-267, August.
    2. repec:rre:publsh:v:34:y:2004:i:1:p:57-71 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wright, Austin L. & Sonin, Konstantin & Driscoll, Jesse & Wilson, Jarnickae, 2020. "Poverty and economic dislocation reduce compliance with COVID-19 shelter-in-place protocols," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 544-554.
    2. Aldo Carranza & Marcel Goic & Eduardo Lara & Marcelo Olivares & Gabriel Y. Weintraub & Julio Covarrubia & Cristian Escobedo & Natalia Jara & Leonardo J. Basso, 2022. "The Social Divide of Social Distancing: Shelter-in-Place Behavior in Santiago During the Covid-19 Pandemic," Management Science, INFORMS, vol. 68(3), pages 2016-2027, March.
    3. Xiao Chen & Hanwei Huang & Jiandong Ju & Ruoyan Sun & Jialiang Zhang, 2022. "Endogenous cross-region human mobility and pandemics," CEP Discussion Papers dp1860, Centre for Economic Performance, LSE.
    4. Wang, Peipei & Liu, Haiyan & Zheng, Xinqi & Ma, Ruifang, 2023. "A new method for spatio-temporal transmission prediction of COVID-19," Chaos, Solitons & Fractals, Elsevier, vol. 167(C).
    5. Pelagatti, Matteo & Maranzano, Paolo, 2021. "Assessing the effectiveness of the Italian risk-zones policy during the second wave of COVID-19," Health Policy, Elsevier, vol. 125(9), pages 1188-1199.
    6. Davide Furceri & Siddharth Kothari & Longmei Zhang, 2021. "The effects of COVID‐19 containment measures on the Asia‐Pacific region," Pacific Economic Review, Wiley Blackwell, vol. 26(4), pages 469-497, October.
    7. Jae-Eun Lee & Seol-A Kwon, 2021. "A Study on the Public’s Crisis Management Efficacy and Anxiety in a Pandemic Situation—Focusing on the COVID-19 Pandemic in South Korea," Sustainability, MDPI, vol. 13(15), pages 1-17, July.
    8. Richard Bluhm & Maxim Pinkovskiy, 2021. "The spread of COVID-19 and the BCG vaccine: A natural experiment in reunified Germany," The Econometrics Journal, Royal Economic Society, vol. 24(3), pages 353-376.
    9. Hausmann, Ricardo & Schetter, Ulrich, 2022. "Horrible trade-offs in a pandemic: Poverty, fiscal space, policy, and welfare," World Development, Elsevier, vol. 153(C).
    10. Miquel Oliu-Barton & Bary S. R. Pradelski & Nicolas Woloszko & Lionel Guetta-Jeanrenaud & Philippe Aghion & Patrick Artus & Arnaud Fontanet & Philippe Martin & Guntram B. Wolff, 2022. "The effect of COVID certificates on vaccine uptake, health outcomes, and the economy," Nature Communications, Nature, vol. 13(1), pages 1-13, December.
    11. Jesper Akesson & Sam Ashworth-Hayes & Robert Hahn & Robert Metcalfe & Itzhak Rasooly, 2022. "Fatalism, beliefs, and behaviors during the COVID-19 pandemic," Journal of Risk and Uncertainty, Springer, vol. 64(2), pages 147-190, April.
    12. Maxim Ananyev & Michael Poyker & Yuan Tian, 2021. "The safest time to fly: pandemic response in the era of Fox News," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 775-802, July.
    13. Raimundo Atal & Paula Bedregal & José A Carrasco & Felipe González & Rodrigo Harrison & Cecilia Vizcaya, 2024. "The Impacts of COVID-19 Restrictions on Quality Adjusted Life Years (QALY): Heterogeneous effects and post-pandemic recovery," PLOS ONE, Public Library of Science, vol. 19(3), pages 1-12, March.
    14. Kalewold Hailu Kalewold, 2023. "Lockdowns and the ethics of intergenerational compensation," Politics, Philosophy & Economics, , vol. 22(3), pages 271-289, August.
    15. Matthew Spiegel & Heather Tookes, 2021. "Business Restrictions and COVID-19 Fatalities [The immediate effect of COVID-19 policies on social distancing behavior in the United States]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5266-5308.
    16. Toan Luu Duc Huynh & Duy Duong, 2022. "Government responses, democracy, and COVID-19 containment: a cross-country study," Economics and Business Letters, Oviedo University Press, vol. 11(3), pages 98-106.
    17. Borsati, Mattia & Nocera, Silvio & Percoco, Marco, 2022. "Questioning the spatial association between the initial spread of COVID-19 and transit usage in Italy," Research in Transportation Economics, Elsevier, vol. 95(C).
    18. Battisti, Michele & Maggio, Giuseppe, 2023. "Will the last be the first? School closures and educational outcomes," European Economic Review, Elsevier, vol. 154(C).
    19. Neha Deopa & Piergiuseppe Fortunato, 2022. "Language and the cultural markers of COVID-19," Post-Print hal-03665755, HAL.
    20. Dhaval Dave & Drew McNichols & Joseph J. Sabia, 2022. "Political violence, risk aversion, and population health: Evidence from the US Capitol riot," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(4), pages 1345-1384, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Z32 - Other Special Topics - - Tourism Economics - - - Tourism and Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spt:apfiba:v:15:y:2025:i:5:f:15_5_1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eleftherios Spyromitros-Xioufis (email available below). General contact details of provider: http://www.scienpress.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.