Tourism and Trade in Malaysia: Evidence from Malaysia’s Trading Partners

Articles in Press

Document Type : Research Paper

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Department of Economics, University of Kurdistan, Sanandaj, Iran.

10.22059/ier.2024.283717.1006669

Abstract

As an important economic sector, the international tourism industry has many social, cultural, and economic impacts on the destination country's economy. Tourism has been identified as one of the key growth sectors in Malaysia's economy. On the other hand, trade openness can be seen as an important catalyst for the growth and development of the tourism industry in an economy. This study investigates the causality relationships between tourism and openness to trade, using aggregated variables—total tourist arrivals and data on trade components (merchandise and services) for each of Malaysia's top five trading partners, namely, China, the United States, Japan, Singapore, and Thailand. The study shows bidirectional causality between international tourist arrivals in Malaysia and openness to merchandise and services trade. The overall findings imply that further trade liberalisation with Malaysia's major trading partners is an important catalyst for the growth and development of the tourism sector, especially in the case of Malaysia-Singapore and Malaysia-Thailand trade.

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Iranian Economic Review

Articles in Press, Accepted Manuscript
Available Online from 26 February 2024

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