‘I’ve been to Bali too’ (and I will be going back): are terrorist shocks to Bali's tourist arrivals permanent or transitory?

International visitor arrivals to Bali are examined using univariate and panel Lagrange multiplier (LM) unit root tests with one and two structural breaks to ascertain if shocks to the time path of tourist arrivals are permanent or transitory. The univariate LM unit root tests with one and two structural breaks fail to reject the null hypothesis of a unit root in international visitor arrivals to Bali. However, the panel LM unit root tests with one and two structural breaks applied to a panel of Bali's 11 major source markets reject the null and support the alternative hypothesis of a joint trend-stationary series with transitory shocks. This result suggests that, the effects of the recent terrorist acts on Bali on the growth path of tourist arrivals from major markets are only transitory and that as a consequence Bali's tourism sector is sustainable in the long run.     

Does tourism predict macroeconomic performance in Pacific Island countries?

In this paper, we examine whether tourism predicts macroeconomic variables in Pacific Island countries (PICs), namely, Fiji, the Solomon Islands, PNG, Vanuatu, Samoa, and Tonga. We form seven panels of PICs — one full panel of six countries and six panels where, one-by-one, each country is excluded from the panel. We apply the Westerlund and Narayan (2012a) panel regression framework, where the null hypothesis is that visitor arrivals do not predict macroeconomic variables, which we proxy with 11 indicators, for panels of countries. We find that visitor arrivals consistently predict exports and money supply, and to a lesser extent, exchange rates and GDP.     

How resilient is La Réunion in terms of international tourism attractiveness: an assessment from unit root tests with structural breaks from 1981-2015

Even if local policymakers increasingly claim that tourism is one of the key factors of future economic development for the French small island La Réunion, international tourist arrivals are observed to be locked in a stagnation phase since the beginning of the 2000s. Starting from this stylized fact, this article aims to study if this phenomenon results from major external events hurting this economy regularly. Next, by using univariate unit root procedures with structural breaks, we test for evidence of permanent or transitory effects of external shocks on international tourist inflows (total, by source markets, and by category) over the period 1981–2015. Finally, the empirical analysis allows us to reject the null of a unit root. Then, stagnation of tourism arrivals to La Réunion is not due to exogenous shocks but probably results from endogenous impediments within the domestic tourism industry and unsuitable public policies.     

Modelling inbound international tourism demand in small Pacific Island countries

ABSTRACT

In this study, we estimate inbound international tourism demand models at the individual source market-destination and overall destination levels for Fiji, Cook Islands, Tonga and Vanuatu from 2002Q1 to 2016Q2 and Samoa from 2002Q4 to 2015Q3. Tourism demand is measured by visitor arrivals, tourism prices, the source country’s real GDP, tourism prices in substitute destinations, seasonality and structural breaks, all of which are considered plausible determinants. The models are estimated using the ARDL-bounds approach, structural breaks are identified using the Bai and Perron break test, and seasonality is tested using the US Census Bureau’s X-13 ARIMA-SEATS methodology. The study is important because it presents new evidence on price, income, and substitute price sensitivity, word of mouth, seasonality, and structural-breaks effects in Pacific island destinations.     

中国航空国际网络结构特征及其对入境旅游的影响

国际旅游对航空运输高度依赖,入境旅游流网络与航空网络有密切关系。应用社会网络分析法,利用中国大陆城市与国境外城市间的国际航班信息,对由45个大陆城市与4个境外城市、110个外国城市组成的中国航空国际网络的结构特征及其对中国入境旅游的影响进行研究。得出结论：①中国航空国际网络是核心—边缘网络;网络中核心节点数量偏少且主要是出入境口岸城市,香港、北京、上海、广州、首尔、新加坡等城市是核心节点;边缘节点数量偏多,许多重要的入境旅游目的地城市和客源地城市在中国航空国际网络中的地位不够重要。②中国航空国际网络对入境旅游具有决定性影响,不仅决定其空间组织模式,而且决定入境客源国结构,还影响旅游城市的入境旅游接待规模。③从拓展中国入境旅游外国市场和扩大规模的角度看,中国航空国际网络结构亟待改善：首先,要与世界主要国家的国际枢纽机场建立更多的国际航班联系;其次,要提升我国北京、上海和广州等机场在国际航空网络中的枢纽地位;第三,要在我国中西部地区培育国际枢纽机场,改变枢纽机场集中分布在东部沿海地区的空间分布格局;第四,要充分发挥香港的枢纽作用,拓展入境旅游外国市场。     

Asymmetric causality between Australian inbound and outbound tourism flows

We employ the asymmetric version of the Granger causality test to assess how Australian inbound and outbound tourism flows across 49 markets (countries) are driven by the sign-dependent variations in departure series or vice versa. A multivariate generalized autoregressive conditional heteroscedasticity (MGARCH) model is also estimated to study the time-varying co-volatility between inbound and outbound tourism growth rates. We find that rising co-volatility spillovers between inbound and outbound tourism are statistically significant for a number of markets. The six markets that are most susceptible to global shocks are China, Hong Kong, Papua New Guinea, Singapore, South Africa and the United Kingdom. China is by far the largest of these markets and, except for the United Kingdom, both arrivals and departures for each of these countries represent growing markets for Australia. We present recommendations for policymakers and destination management organizations (DMOs) to assist in developing customized strategies targeting resilient inbound markets in order to optimize tourism performance and reduce potential losses in times of crisis.     

Tourism,trade and growth: the case of Cyprus

Although the relationship between international trade and economic growth has found a wide application area in the literature over the years, this can not be said about tourism and growth or trade and tourism. This study employs the bounds test for cointegration and Granger causality tests to investigate a long-run equilibrium relationship between tourism, trade and real income growth, and the direction of causality among themselves for Cyprus. Results reveal that tourism, trade and real income growth are cointegrated; thus, a long-run equilibrium relationship can be inferred between these three variables. On the other hand, Granger causality test results suggest that real income growth stimulates growth in international trade (both exports and imports) and international tourist arrivals to the island. Furthermore, growth in international trade (both exports and imports) also stimulates an increase in international tourist arrivals to Cyprus. And finally, real import growth stimulate growth in real exports in the case of Cyprus.     

Sunk costs of exporting and the role of experience in international trade

This paper estimates the importance of destination‐specific sunk costs of exporting and investigates the role of firms' previous experience in international trade for the decision to export to a market. While destination‐specific sunk costs are important, firms' experience in international trade can help to overcome these costs more easily. In particular, import experience from a market is found to facilitate exporting to this country and export experience from other markets can increase the probability of exporting to a country. This latter effect turns out to be conditional on the characteristics and number of markets served by a firm.     

Tourism and trade in OECD countries. A dynamic heterogeneous panel data analysis

This article studies the empirical link between international tourism and trade. We apply dynamic heterogeneous panel data techniques to analyse both long and short-run relationship for the case study of OECD countries. This link is studied by estimating the cointegration vector and analysing the short causality between variables. The analysis recognises that inbound tourism can promote international trade and also that international flow of goods requires and may encourage tourist arrivals and departures. The statistical significance of this link supports the presence of business opportunities due to the potential complementary relationship between tourism and trade. The results suggest a short-run nexus between tourism and trade, and that these variables are cointegrated.     

Linder Revisited: Trade and Development in the Spanish Economy

The literature has tended to treat Linder’s hypothesis with excessive simplicity given the absence of any formalization for this intuitive theory on trade potential in manufacturers, closely related to the intra‐industry trade paradigm. Against this background, in this paper we first propose a complete empirical model of bilateral trade containing all the determinants suggested by Linder, with special emphasis being placed on non‐homothetic preferences, national income distribution, international economic convergence and geographic distance. We then test the model in an appropriate case, namely that of Spain during the period of its economic transition running from approximately 1959 to 1986. This period was characterized by increasing openness and structural change, as well as by convergence until that country’s integration into the then European Economic Community. The results confirm the importance of the characteristics of internal demand, essentially of income distribution and non‐homothetic preferences. We find that trade horizons delimited by bilateral proximity in development and geographical distance, together with multilateral convergence in economic development are the main indicators for selecting trade partners as markets and suppliers, thereby reinforcing the idea that foreign markets can be considered as an extension of the national market.     

Tourism Taxes: Implications for Tourism Demand in the UK

Before one can understand tax implications for the tourism industry, one must understand the sensitivity of tourism demand. Using a recently developed theoretical framework, we model inbound tourism demand in the UK. The results suggest that tourism demand in the UK is very price sensitive and that measures which result in increasing tourism prices will have a significant negative impact on tourist arrivals. It is believed that a reduction in the VAT rate could boost UK's tourism sector, depending on the extent to which a decrease in taxation is passed on in the form of price reductions. The results also suggest that arrivals from neighboring countries are 98% higher than from distant origins; however, expenditure per capita of the former is 52% lower than the latter. We also found that common language between the origin and the destination increases arrivals 7% more than non‐native English‐speaking origins.     

AGGREGATION,HETEROGENEOUS AUTOREGRESSION AND VOLATILITY OF DAILY INTERNATIONAL TOURIST ARRIVALS AND EXCHANGE RATES*

Tourism is a major source of service receipts for many countries, including Taiwan. The two leading tourism countries for Taiwan are Japan and the USA, which are sources of short‐ and long‐haul tourism, respectively. As a strong domestic currency can have adverse effects on international tourist arrivals through the price effect, daily data from 1 January 1990 to 31 December 2008 are used to model the world price, exchange rates, and tourist arrivals from the world, the USA and Japan to Taiwan, and their associated volatility. Inclusion of the exchange rate and its volatility captures approximate daily and weekly price and price volatility effects on world, US and Japanese tourist arrivals to Taiwan. The heterogeneous autoregressive model is used to approximate the slowly decaying correlations associated with the long‐memory properties in daily and weekly exchange rates and international tourist arrivals, to test whether alternative short‐ and long‐run estimates of conditional volatility are sensitive to the long‐memory in the conditional mean, to examine asymmetry and leverage in volatility, and to examine the effects of temporal and spatial aggregation. The approximate price and price volatility effects tend to be different, with the exchange rate typically having the expected negative impact on tourist arrivals to Taiwan, whereas exchange rate volatility can have positive or negative effects on tourist arrivals to Taiwan. For policy purposes, the empirical results suggest that an arbitrary choice of data frequency or spatial aggregation will not lead to robust findings as they are generally not independent of the level of aggregation used.     

Global Integration

This article argues that there are underlying changes in the world economy due to growing integration of the national economies which are more profound than the events in particular commodity markets, and that our national economic policies should be significantly shaped by these changes. Integration is defined in terms of the convergence of prices on international markets. It is occurring in the markets for commodities, factors and technologies. The freeing of trade multilaterally and unilaterally and the formation of regional trading arrangements have all played a part in greater global integration. Global and regional integration have changed the nature of the international markets in which we trade and require corporations to change their production and marketing strategies. Governments have an increasingly important role in negotiating international and regional agreements and in providing an environment that allows the domestic producers to compete on international markets. There is, however, no need to change the unilateral trading policies of Australia.     

International reserves and trilemma policy convergence in Malaysia

Some observations have suggested that international reserves contribute to trilemma policy convergence in emerging countries. Nonetheless, this hypothesis needs more solid empirical evidence to determine its validity. This article tests this hypothesis by examining the relationships among the index of policy dispersion, international reserves and trade openness in a threshold model in Malaysia. As a small open economy, Malaysia has accumulated a relatively large amount of international reserves since the mid-1990s. The results indicate that the positive impact of international reserves on reducing policy dispersion or achieving policy convergence is found only if the international reserves are above a threshold. Hence, this conclusion supports the need to hold a relatively high level of international reserves in Malaysia.     

基于异质面板模型的我国省际旅游业发展与经济增长研究

利用1999—2007年中国31个省市的入境旅游人次、国际旅游(外汇)收入、国内旅游人次和国内旅游收入四个指标的面板数据衡量旅游业发展水平,并运用异质面板协整方法检验中国省际旅游业发展与经济增长之间的关系。研究发现:国内旅游与入境旅游的发展对全国及所有省市的经济增长均有显著的正效应,其中,入境旅游对经济增长的促进作用更显著;与此同时,经济增长和入境旅游人次、国际旅游(外汇)收入和国内旅游收入存在长期单向Granger因果关系,表明经济增长也推动着入境旅游和国内旅游的发展。     

Contribution of international ecotourism to comprehensive economic development and convergence in the Central American and Caribbean region

Drawing on the positive experience from Costa Rica, the study examines whether international ecotourism makes a significant contribution to comprehensive economic development for the Central American and Caribbean region and contributes to comprehensive economic convergence. Following a standard empirical growth model, a dynamic panel regression model is estimated using time-series data from 1995 until 2012 for a cross section of seven countries. The interaction of international tourism and various established sustainability indicators is employed allowing ecotourism to be consistently quantified across countries, while numerous country-specific structural characteristics are controlled for. The estimation results show that international ecotourism has a statistically significant positive effect on both traditional economic development (real GDP per capita) and comprehensive economic development (adjusted net savings; ANS per capita), which is a measure of a society’s potential future well-being, thus providing evidence in support of the tourism-led growth hypothesis and pointing towards an important role for ecotourism in driving comprehensive economic convergence.     

Testing the tourism-induced EKC hypothesis: The case of Singapore

This study investigates the relationship between tourism development and carbon emissions in Singapore through testing Environmental Kuznets Curve hypothesis, which is a major tourist destination state and whose economy is linked with diverse energy resources, high-level urbanization, and rapid industrialization. Results reveal that tourism development and carbon emissions are in long-term equilibrium relationship; carbon dioxide emission converges to its long-term equilibrium level by 76.0% speed of adjustment through the channels of tourism, energy consumption, and output growth. Tourist arrivals have a negatively significant effects on carbon dioxide emission levels both in the long-term and the short-term periods. Finally, results of the Granger causality tests reveal that there is unidirectional causality that runs from tourism development to carbon emission growth in the long-term of the economy of Singapore. Therefore, the tourism-induced EKC hypothesis is confirmed in the case of Singapore.     

Technological catch-up: Gradual diffusion of technology and convergence in the neoclassical growth model

In this paper, I study the effects of the international gradual transmission of technology on the convergence processes among countries. In this way, the international gradual diffusion of technology makes possible a greater potential improvement capacity to the less developed country in its technological level. When this hypothesis is included in the Solow-Swan growth models, the paper shows that the convergence hypothesis will now be maintained only in the growth rates since a gap in income levels will remain in the long run. That conditional convergence will be explained by two factors: the diminishing returns for cumulative factor and the gradual diffusion of technology. I will finish this paper with empirical evidence of these two factors explaining convergence.     

Real exchange rates, preferences, and incomplete markets: evidence, 1961–2001

Abstract.  Many international macroeconomic models link the real exchange rate to a ratio of marginal utilities. We examine this link empirically, allowing the marginal utility of consumption to depend on government expenditure, real money balances, or external habit. We also consider two environments with incomplete asset markets; one with exogenously missing markets but an endogenous discount rate that anchors the distribution of wealth and one with endogenous market segmentation. Although none of these satisfies theoretical and over‐identifying restrictions for every country, utility with external habit persistence provides the best match with real exchange rates for OECD countries between 1961 and 2001. JEL classification: F41     

Trade Policy and Productivity Growth in OECD Manufacturing *

Trade liberalization may promote economic growth in a number of ways, including by accelerating the rate of technological change. Firms that face more intense import competition may be spurred to greater rates of innovation; firms which export may absorb new technologies through their contact with international markets. This paper examines evidence on trade policy and productivity growth for a sample of thirteen OECD countries and including eighteen manufacturing sectors, using data primarily from the 1980s. Within individual sectors, there are strong productivity convergence effects within the OECD. After controlling for convergence, we find a positive association between high rates of productivity growth and low tariffs, and between high productivity growth and strong export performance. We found no particular association between high productivity growth and import penetration. The results are consistent with the possibility of positive linkages between trade liberalization and accelerated productivity growth. [F1, O4]