IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/21056.html
   My bibliography  Save this paper

Dynamic inter-relationship between trade, economic growth and tourism in Malaysia

Author

Listed:
  • Sarmidi, Tamat
  • Salleh, Norlida H

Abstract

This study aims to test a hypothesis that postulate a positive inter-relationship between international flows of tourist, trade and economic growth. Although tourism is one of the major components in the trade of services, and it has been certified by large number of literatures on the strong correlation between tourism industry and economic development, yet not much is known on the dynamic inter-relationship between these three variables. Closing-up this gaping hole, this study employs the cointegration tests under autoregressive distributed lag (ARDL) structure to investigate a dynamic inter-relationship between economic development, total trade (import and export) and number of tourist arrival for Malaysia and her major tourism partners ((ASEAN countries) . The estimated result based on the long run time series behavior for number of tourist arrival, volume of total trade and economic development’s indicator shows that these three variables are moved in tandem. Interestingly, in the analysis of short run behavior, we find that number of tourist arrival has significantly Granger caused total trade flows at least for some countries. At the same time, in the short-run, we find that both growth in total trade (export and import) and international tourists’ arrival to Malaysia have uni-directionally Granger caused real income growth and there is statistical evidence for international trade to lead tourist arrival.

Suggested Citation

  • Sarmidi, Tamat & Salleh, Norlida H, 2010. "Dynamic inter-relationship between trade, economic growth and tourism in Malaysia," MPRA Paper 21056, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:21056
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/21056/1/MPRA_paper_21056.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Christian Fischer & Luis Gil-Alana, 2009. "The nature of the relationship between international tourism and international trade: the case of German imports of Spanish wine," Applied Economics, Taylor & Francis Journals, vol. 41(11), pages 1345-1359.
    2. Jacint Balaguer & Manuel Cantavella-Jorda, 2002. "Tourism as a long-run economic growth factor: the Spanish case," Applied Economics, Taylor & Francis Journals, vol. 34(7), pages 877-884.
    3. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    4. Salih Katircioglu, 2009. "Tourism, trade and growth: the case of Cyprus," Applied Economics, Taylor & Francis Journals, vol. 41(21), pages 2741-2750.
    5. Abdulnasser Hatemi-J & Manuchehr Irandoust, 2001. "Productivity Performance and Export Performance: A Time-Series Perspective," Eastern Economic Journal, Eastern Economic Association, vol. 27(2), pages 149-164, Spring.
    6. Jordan Shan & Ken Wilson, 2001. "Causality between trade and tourism: empirical evidence from China," Applied Economics Letters, Taylor & Francis Journals, vol. 8(4), pages 279-283.
    7. N. Kulendran & Kenneth Wilson, 2000. "Is there a relationship between international trade and international travel?," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 1001-1009.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    economic growth; trade; tourism; cointegration; and Malaysia;

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • A10 - General Economics and Teaching - - General Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:21056. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.