Macroeconomic Shocks and Malaysian Tourism Industry: Evidence from a Structural VAR Model

Authors

1 Department of Commerce, University of Gujrat, Gujrat, Pakistan

2 Department of Economics, University of Wah, Quaid Avenue, Wah Cantt, Pakistan

3 Institute of Business Administration, University of the Punjab, Lahore, Pakistan

Abstract

Abstract
 
his study employs a structural vector autoregression (SVAR) model to investigate the macroeconomic shocks on Malaysian tourism industry, especially how the economy dynamically responds to oil price shocks, exchange rates, changes in price level, exports, economic growth and tourism income during the study time period from January 2001 to December 2012. The results indicate that oil price shocks, economic growth, exchange rate, and exports have a contemporaneous inverse impact on tourism revenues except for consumer price index which has a positive impact. This study added instant information to manage tourism industry in Malaysia. The findings of the study are useful to implement a number of corrective measures for the promotion of tourism in a country.
 

Keywords

References

Becken, S. (2011). Oil, the Global Economy and Tourism. Tourism Review, 66(3), 65-72.
Becken, S., & Lennox, J. (2012). Implications of a Long-Term Increase in Oil Prices for Tourism. Tourism Management, 33(1), 133-142.
Beckmann, J. (2013). Nonlinear Adjustment, Purchasing Power Parity and the Role of Nominal Exchange Rates and Prices. The North American Journal of Economics and Finance, 24, 176-190.
Bilen, M., Yilanci, V., & Eryüzlü, H. (2017). Tourism Development and Economic Growth: a Panel Granger Causality Analysis in the Frequency Domain. Current Issues in Tourism, 20(1), 27-32.
Blake, A., Arbache, J. S., Sinclair, M. T., & Teles, V. (2008). Tourism and Poverty Relief. Annals of Tourism Research, 35(1), 107-126.
Brida, J. G., Cortes-Jimenez, I., & Pulina, M. (2016). Has the Tourism-led Growth Hypothesis been validated? A Literature Review. Current Issues in Tourism, 19(5), 394-430.
Brida, J. G., Lanzilotta, B., Pereyra, J. S., & Pizzolon, F. (2015). A Nonlinear Approach to the Tourism-led Growth Hypothesis: The Case of the MERCOSUR. Current Issues in Tourism, 18(7), 647-666.
Cárdenas-García, P. J., Sánchez-Rivero, M., & Pulido-Fernández, J. I. (2015). Does Tourism Growth Influence Economic Development? Journal of Travel Research, 54(2), 206-221.
Cetin, G., Alrawadieh, Z., Dincer, M. Z., Istanbullu Dincer, F., & Ioannides, D. (2017). Willingness to Pay for Tourist Tax in Destinations: Empirical Evidence from Istanbul. Economies, 5(2), 21-31.
Chatziantoniou, I., Filis, G., Eeckels, B., & Apostolakis, A. (2013). Oil Prices, Tourism Income and Economic Growth: A Structural VAR Approach for European Mediterranean Countries. Tourism Management, 36, 331-341.
Chen, C. M., Lin, Y. L., & Hsu, C. L. (2017). Does Air Pollution Drive Away Tourists? A Case Study of the Sun Moon Lake National Scenic Area, Taiwan. Transportation Research Part D: Transport and Environment, 53, 398-402.
Copeland, B. R. (1991). Tourism, Welfare and De-industrialization in a Small Open Economy. Economica, 58(232), 515-529.
Dritsakis, N. (2004). Tourism as a Long-run Economic Growth Factor: an Empirical Investigation for Greece Using Causality Analysis. Tourism Economics, 10(3), 305-316.
Eugenio-Martin, J. L., Martín Morales, N., & Scarpa, R. (2004). Tourism and Economic Growth in Latin American Countries: A Panel Data Approach. FEEM Working Paper, Retrived from http://ssrn.com/abstract=504482.
Frederick, M. (1993). Rural Tourism and Economic Development. Economic Development Quarterly, 7(2), 215-224.
Furceri, D., & Zdzienicka, A. (2011). The Real Effect of Financial Crises in the European Transition Economies. Economics of Transition, 19(1), 1-25.
Hall, S. G. (1991). The Effect of Varying Length VAR Models on the Maximum Likelihood Estimates of Cointegrating Vectors. Scottish Journal of Political Economy, 38(4), 317-323.
---------- (1989). Practitioners Corner: Maximum Likelihood Estimation of Cointegration Vectors: An Example of the Johansen Procedure. Oxford Bulletin of Economics and Statistics, 51(2), 213-218.
Hatemi-J, A. (2016). On the Tourism-led Growth Hypothesis in the UAE: a Bootstrap Approach with Leveraged Adjustments. Applied Economics Letters, 23(6), 424-427.
Hazari, B. R., & Sgro, P. M. (2004). Tourism and Growth in a Dynamic Model of Trade. In Tourism, Trade and National Welfare (185-195). Bingley, West Yorkshire: Emerald Group Publishing Limited.
Helpman, E., & Krugman, P. R. (1985). Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy. Cambridge: MIT press.
Ibrahim, M. H. (2006). Integration or Segmentation of the Malaysian Equity Market: An Analysis of Pre-and Post-capital Controls. Journal of the Asia Pacific Economy, 11(4), 424-443.
Jiang, Y., & Ritchie, B. W. (2017). Disaster Collaboration in Tourism: Motives, Impediments and Success Factors. Journal of Hospitality and Tourism Management, 31, 70-82.
Johansen, S. (1992). Testing Weak Exogeneity and the Order of Cointegration in UK Money Demand Data. Journal of Policy Modelling, 14(3), 313-334.
Joshi, O., Poudyal, N. C., & Larson, L. R. (2017). The Influence of Socio-political, Natural, and Cultural Factors on International Tourism Growth: a Cross-country Panel Analysis. Environment, Development and Sustainability, 19(3), 825-838.
Katircioglu, S. T. (2009). Revisiting the Tourism-led-growth Hypothesis for Turkey Using the Bounds Test and Johansen Approach for Cointegration. Tourism Management, 30(1), 17-20.
Khan, S. A. R., Qianli, D., SongBo, W., Zaman, K., & Zhang, Y. (2017). Travel and Tourism Competitiveness Index: The Impact of Air Transportation, Railways Transportation, Travel and Transport Services on International Inbound and Outbound Tourism. Journal of Air Transport Management, 58, 125-134.
Khoshnevis Yazdi, S., Homa Salehi, K., & Soheilzad, M. (2017). The Relationship between Tourism, Foreign Direct Investment and Economic Growth: Evidence from Iran. Current Issues in Tourism, 20(1), 15-26.
Khoshnevis Yazdi, S., & Khanalizadeh, B. (2017). Tourism Demand: a Panel Data Approach. Current Issues in Tourism, 20(8), 787-800.
Lean, H. H., & Smyth, R. (2009). Asian Financial Crisis, Avian Flu and Terrorist Threats: Are Shocks to Malaysian Tourist Arrivals Permanent or Transitory? Asia Pacific Journal of Tourism Research, 14(3), 301-321.
---------- (2008). Are Malaysia's Tourism Markets Converging? Evidence from Univariate and Panel Unit Root Tests with Structural Breaks. Tourism Economics, 14(1), 97-112.
Liu, A., & Liu, H. H. J. (2008). Tourism Employment Issues in Malaysia. Journal of Human Resources in Hospitality & Tourism, 7(2), 163-179.
Liu, A. (2006). Tourism in Rural Areas: Kedah, Malaysia. Tourism Management, 27(5), 878-889.
Malik, M. A. S., Shah, S. A., & Zaman, K. (2016). Tourism in Austria: Biodiversity, Environmental Sustainability, and Growth Issues. Environmental Science and Pollution Research, 23(23), 24178-24194.
McCombie, J, S, L., Thirlwall, A, P., & Thompson, P. (1994). Economic Growth and the Balance-of-payments Constraint.
New York: St. Martin's Press.
Ministry of Tourism and Culture of Malaysia. (2016). Malaysia Tourism Statistics in Brief. Retrieved from
 http://www.tourism.gov.my/statistics.
Nassani, A. A., Aldakhil, A. M., Abro, M. M. Q., & Zaman, K (2017a). Effective International Tourism Management: A Strategic Approach. Social Indicators Research, 137, 1207-1224.
Nassani, A. A., Zaman, K., Aldakhil, A. M., & Abro, M. M. Q. (2017b). War Economy and Pleasure: Assessing the Effects of Military Expenditure on Tourism Growth. Quality & Quantity, 51(4), 1733-1754.
Nicolau, J. L. (2008). Characterizing Tourist Sensitivity to Distance. Journal of Travel Research, 47(1), 43-52.
Poh-Poh, W. (1990). Coastal Resources Management: Tourism in Peninsular Malaysia. ASEAN Economic Bulletin, 7(2), 213-221.
Qureshi, M. I., Hassan, M. A., Hishan, S. S., Rasli, A. M., & Zaman, K. (2017). Dynamic Linkages between Sustainable Tourism, Energy, Health and Wealth: Evidence from Top 80 International Tourist Destination Cities in 37 Countries. Journal of Cleaner Production, 158, 143-155.
Sajjad, F., Noreen, U., & Zaman, K. (2014). Climate Change and Air Pollution Jointly Creating Nightmare for Tourism Industry. Environmental Science and Pollution Research, 21(21), 12403-12418.
Saha, S., Su, J. J., & Campbell, N. (2017). Does Political and Economic Freedom Matter for Inbound Tourism? A Cross-national Panel Data Estimation. Journal of Travel Research, 56(2), 221-234.
Salleh, N. H. M., Othman, R., & Ramachandran, S. (2007). Malaysia’s Tourism Demand from Selected Countries: The ARDL Approach to Cointegration. International Journal of Economics and Management, 1(3), 345-363.
Salleh, N. H. M., Siong-Hook, L., Ramachandran, S., Shuib, A., & Noor, Z. M. (2008). Asian Tourism Demand for Malaysia: A Bound Test Approach. Contemporary Management Research, 4(4), 351-368.
Shah, I. A., & Zaman, K. (2014). Exploring the Relationship between Tourism Development, Economic Growth and Exchange Rate in Oman. South Asian Journal of Tourism and Heritage, 7(1), 29-51.
Singh, A. (1997). Asia Pacific Tourism Industry: Current Trends and Future Outlook. Asia Pacific Journal of Tourism Research, 2(1), 89-99.
Szivas, E., & Riley, M. (1999). Tourism Employment during Economic Transition. Annals of Tourism Research, 26(4), 747-771.
Tang, C. F., & Tan, E. C. (2015). Does Tourism Effectively Stimulate Malaysia's Economic Growth? Tourism Management, 46, 158-163.
Tang, C. F. (2011). Old Wine in New Bottles: Are Malaysia's Tourism Markets Converging? Asia Pacific Journal of Tourism Research, 16(3), 263-272.
Tsui, K. W. H. (2017). Does a Low-cost Carrier Lead the Domestic Tourism Demand and Growth of New Zealand? Tourism Management, 60, 390-403.
Tsui, K. W. H., Yuen, A. C. L., & Fung, M. K. Y. (2018). Maintaining Competitiveness of Aviation Hub: Empirical Evidence of Visitors to China via Hong Kong by Air Transport. Current Issues in Tourism, 21(11), 1260-1284.
Wells, R. J. G. (1982). Tourism Planning in a Presently Developing Country: the Case of Malaysia. Tourism Management, 3(2), 98-107.
Yap, G. (2011). Modelling the Spillover Effects of Exchange Rates on Australia's Inbound Tourism Growth. SSRN, Retrived from
 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1789645.
Yeoman, I., Lennon, J. J., Blake, A., Galt, M., Greenwood, C., & McMahon-Beattie, U. (2007). Oil Depletion: What Does This Mean for Scottish Tourism? Tourism Management, 28(5), 1354-1365.
Zain, Y. (2005). Malaysia Second Most Visited. New Straits Times,  22-23.
Zaman, K., Moemen, M. A. E., & Islam, T. (2017). Dynamic Linkages between Tourism Transportation Expenditures, Carbon Dioxide Emission, Energy Consumption and Growth Factors: Evidence from the Transition Economies. Current Issues in Tourism, 20(16), 1720-1735.
Zaman, K., Shahbaz, M., Loganathan, N., & Raza, S. A. (2016). Tourism Development, Energy Consumption and Environmental Kuznets Curve: Trivariate Analysis in the Panel of Developed and Developing Countries. Tourism Management, 54, 275-283.
Zhang, H. Q., & Kulendran, N. (2017). The Impact of Climate Variables on Seasonal Variation in Hong Kong Inbound Tourism Demand. Journal of Travel Research, 56(1), 94-107.
Iranian Economic Review
Volume 22, Issue 4
October 2018
Pages 1113-1137

Files

Share

How to cite

Statistics