| Abstract: |
Policymakers in the developed and developing countries already heading toward
medical tourism to stimulate economic growth. Nonetheless, the actual impact
of medical tourism on economic growth remains ambiguous. Although medical
tourism may spur economic growth via its impact on foreign currency earnings,
investments, tax revenue, and employment opportunities, it may also leave
numerous negative externalities that either direct or indirectly harmful the
process of economic growth. Undeniably, the effectiveness of relying on
medical tourism to ignite long-term economic growth is remains as a vital
research question. Therefore, this study attempts to address the question by
assessing the effectiveness of medical tourism in stimulating long-term
Malaysia’s economic growth through a well-established neoclassical growth
model and a set of advanced time series econometric approaches. The key
findings of this study are that medical tourism has significant positive
impact on Malaysia’s economic growth in the long-run. Furthermore, we find
that medical tourism Granger-cause economic growth and it is also relatively
the most important factor in explaining the variation of Malaysia’s economic
growth, especially in the long-run. |