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


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


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.


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