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Research Note: Contribution of Foreign Direct Investment to the Tourism Sector in Fiji: An Empirical Study

Author

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  • T. K. Jayaraman

    (School of Economics, Banking and Finance, Fiji National University, PO Box 7222, Valelevu, Nasinu, Fiji)

  • Hong Chen

    (School of Economics, The University of the South Pacific, Private Mail Bag, Suva, Fiji)

  • Markand Bhatt

    (School of Economics, The University of the South Pacific, Private Mail Bag, Suva, Fiji)

Abstract

In the midst of declining external demand due to the world economic downturn since 2008, the tourism sector has emerged as a major source of support to the South Pacific island countries, including Fiji. Tourists from the region's two advanced economies, Australia and New Zealand, find Fiji a more affordable tourist destination than distant European and Asian holiday resorts. The development of the tourism sector in Fiji owes much to foreign direct investment (FDI) in hotels, resorts and other infrastructural facilities. This paper uses bounds cointegration technique and investigates the contribution of FDI to Fiji's tourism sector. The analysis identifies positive associations between FDI and tourism earnings as well as between currency depreciation and tourism earnings.

Suggested Citation

  • T. K. Jayaraman & Hong Chen & Markand Bhatt, 2014. "Research Note: Contribution of Foreign Direct Investment to the Tourism Sector in Fiji: An Empirical Study," Tourism Economics, , vol. 20(6), pages 1357-1362, December.
    • Handle: RePEc:sae:toueco:v:20:y:2014:i:6:p:1357-1362
    DOI: 10.5367/te.2013.0358
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    References listed on IDEAS

    as
    1. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    2. T.K. Jayaraman & Chee-Keong Choong, 2006. "Foreign direct investment in the South Pacific Island Countries: a case study of Fiji," World Review of Entrepreneurship, Management and Sustainable Development, Inderscience Enterprises Ltd, vol. 2(4), pages 309-322.
    3. World Bank, 2013. "World Development Indicators 2013," World Bank Publications - Books, The World Bank Group, number 13191.
    4. Sumei Tang & E.A. Selvanathan & Saroja Selvanathan, 2007. "The Relationship between Foreign Direct Investment and Tourism: Empirical Evidence from China," Tourism Economics, , vol. 13(1), pages 25-39, March.
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    Cited by:

    1. Nikeel Kumar & Ronald Ravinesh Kumar & Radika Kumar & Peter Josef Stauvermann, 2020. "Is the tourism–growth relationship asymmetric in the Cook Islands? Evidence from NARDL cointegration and causality tests," Tourism Economics, , vol. 26(4), pages 658-681, June.
    2. Juan Manuel Berbel-Pineda & Beatriz Palacios-Florencio & José Manuel Ramírez-Hurtado, 2017. "Determining factors in the internationalization of hotel industry," Tourism Economics, , vol. 23(4), pages 768-787, June.
    3. Ronald Ravinesh Kumar & Peter Josef Stauvermann, 2023. "Tourism and economic growth in the Pacific region: evidence from five small island economies," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 28(3), pages 894-921, July.
    4. Kehinde Mary Bello, 2024. "Parallel exchange rate market and macroeconomic performance in Nigeria: SVAR approach," SN Business & Economics, Springer, vol. 4(11), pages 1-24, November.
    5. Xiuying Ma & Yongjing Wang & Haiyan Song & Han Liu, 2020. "Time-varying mechanisms between foreign direct investment and tourism development under the new normal in China," Tourism Economics, , vol. 26(2), pages 324-343, March.
    6. K. Ravinthirakumaran & E. A. Selvanathan & S. Selvanathan & T. Singh, 2019. "Tourism and Foreign Direct Investment Inflows in Sri Lanka," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 20(2), pages 248-273, September.
    7. Jayaraman, Tiru & Choong, Chee-Keong & Fatt Ng, Cheong & Bhatt, Markand, 2017. "Tourism-Growth Nexus in the South Pacific Islands: Role of Financial Sector Development as a Contingent Factor An Empirical Study of Fiji: 1980-2014," MPRA Paper 79461, University Library of Munich, Germany.
    8. Juan Carlos Martín & Pedro Moreira & Concepción Román, 2020. "A hybrid-fuzzy segmentation analysis of residents’ perception towards tourism in Gran Canaria," Tourism Economics, , vol. 26(7), pages 1282-1304, November.

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