Are external shocks permanent or transitory? An analysis of visitor arrivals to Thailand

Tourism industry in Thailand has recently experienced several external shocks such as September 11 attacks, SARS outbreak, Bird Flu, Political unrest and the recent global financial crisis which may have a temporary or permanent impact on the number of visitor arrivals to the country. This paper conducts univariate and panel Lagrange Multiplier tests with a break proposed by Lee and Strazicich (2004) and Im, Lee, and Tieslau (2005) to identify the time of the structural break and to determine whether shocks to visitor arrivals to Thailand have a temporary or permanent impact. We use annual data for Thailand’s top ten source markets, Malaysia, Japan, Korea, China, United Kingdom, United States, Singapore, Germany, Taiwan and Hong Kong over the period of 1988-2006. Results from the univariate estimation models indicates that shocks have a temporary effect on visitor arrivals to Thailand from China, Hong Kong, Japan, Korea, Singapore and the US and thus Thailand’s tourism industry from these countries is sustainable in the long run. However, shocks have a permanent effect on tourism in Thailand from Germany, Malaysia, Taiwan and UK. The panel tests indicate that shocks have only a transitory effect on the number of visitor arrivals to Thailand

Causal Relationship between Tourism and Economic Growth in Sri Lanka: Some Empirical Evidence

Although there are arguments that development in tourism industry leads to economic development, very few studies empirically addressed this issue. This paper investigates the issue from a developing country perspective: Sri Lanka. We use annual data from 1960 to 2000 to model the causal relationship between these two variables (tourism and economic growth) using multivariate cointegration, error-correction modelling and variance decomposition analysis. The results of the study indicate that there is a significant causal relationship from tourism receipts to gross domestic product of Sri Lanka. Therefore, economic policies should be directed to boost tourism industry so that the GDP can be increased resulting in a higher economic growth. Paper presented at the 17th Council for Australian University Tourism and Hospitality Education's (CAUTHE) annual conference, titled Tourism: Past Achievements, Future Challenges, hosted by the University of Technology, Sydney, and the University of New South Wales

Tourism and Economic Growth: an empirical evidence from the Middle East region

In this paper, we used a panel data analysis toinvestigate the impact of tourism receipts on economic growth for three countries from the Middle East (Saudi Arabia, Jordan and Bahrain). Results show tht a long-run relationship exits between tourism development and growth. Paper was presented at the Eighth International GABER conference, December 2011, held in Dubai

Do External Shocks Have a Permanent or a Transitory Effect on Thailand’s Tourism Industry?

Given the number and the frequency of external shocks encountered by Thailand in the last two decades, this study identifies the number and the location of the breaks and tests to determine whether the breaks have a transitory or a permanent effect on international tourist arrivals to Thailand for its top 10 source countries using both univariate and panel unit root tests with structural breaks. The findings suggest that break dates coincide with the Asian financial crisis, the September 11 attack, and the SARS and the bird flu outbreaks. The univariate unit root tests with structural breaks reject the null hypothesis of a nonstationarity in tourist arrivals from all countries. Furthermore, panel unit root tests with one and two structural breaks also reject the joint null hypothesis of a nonstationarity. These findings imply that external shocks have only a transitory effect on tourist arrivals and Thailand's tourism sector will return to its long-run equilibrium path