Tourism demand in Malaysia: Evidence from panel data

This paper attempts to investigate economic and non economic factors that influence international tourist arrivals from ASEAN and OECD countries to Malaysia. Based on the sample period of fifteen years (ranging from 1995 to 2009), the data are analyzed by employing the panel data econometric technique (fixed-/random-effect model). The result indicate that the level of income in tourists‘ country of origin, prices of tourism in the substitute destination (Singapore) and exchange rates are significant in determining the flow of international tourist from ASEAN and OECD countries into Malaysia. In addition, the non economic factors (the words-of-mouth effect, the incident of Tsunami aftermath in 2004 and health issues) are also found to be significant in influencing international tourist arrivals from these countries