| 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. |