International Tourism Demand and Economic Growth in Malaysia

Being one of the more open economic sectors scrutinised by world media, the tourism industry has emerged as an important industry in Malaysia. At present, the industry is the country's third largest foreign exchange earner. The contribution of tourism industry to the economy depends on the level of demand for tourism related activities or tourism services by foreign and domestic tourists. However, the flow of foreign tourists to a particular country is believed to be dynamically unstable due to its sensitivity to various socioeconomic, socio-political, socio-cultural, and geographical factors. This thesis has identified several socioeconomic factors that may significantly affect tourist arrival from ASEAN and non-ASEAN countries to Malaysia. In addition, this study also investigated the presence of short-run and long-run relationships between tourism demand and factors influencing tourism demand. Additionally, the causal relationship between international tourism receipts and real economic growth in Malaysia was also explored. In order to address these objectives, the study used the panel data econometric fixed-/random-effects model in determining the major factors influencing tourist arrival from ASEAN and non-ASEAN countries in Malaysia based on a sample period from 1994 to 2004. Cointegration test and error-correction model were employed in investigating the presence of short-run and long-run relationships between tourism demand and its determinants. In addition, both time-series and panel causality tests were used in determining the causal relationship between international tourism receipts and real economic growth. Results indicated that income of tourist country of origin; the relative price of tourism in Malaysia; lagged prices; the prices of tourism in complementary destinations (for Singapore and Indonesia); the prices of tourism in substitute destinations (for Thailand and the Philippines); the word-of-mouth effect; the Malaysia ... Truly Asia global campaign; and the spread of the SARS in Asia are significant in determining the demand for tourism in Malaysia. In addition, the results of cointegration test and error-correction model revealed the presence of short-run and long-run relationships between tourism demand and its determinants. Moreover, the causality test results indicated that there is a strong relationship between international tourism receipts and real economic growth, which supports the hypothesis that the tourism industry is a significant contributor to the economic growth of Malaysia. The results of the study had revealed several policy implications. Firstly, Malaysia needs to maintain its price competitiveness in order to attract more tourist arrivals. Secondly, in order to continue promoting Malaysia as a preferred tourist destination in this region, Malaysia should continue to facilitate global and regional strategic alliances and smart partnerships among governments, tourist organisations and the industries, especially with Singapore and Indonesia, which were found to be complementary destinations for Malaysia. Besides, the private sector should also be encouraged to develop innovative tourism products and services to meet the demand of different market segments as well as develop potential niche markets. Thirdly, Malaysia's image as an attractive tourist destination should be further internationalised through marketing and promotion activities. Fourthly, Malaysia should step up security patrols, particularly in remote tourist resorts, to ensure the safety of tourists. Lastly, the public sector should supplement private sector efforts and concentrate on the upgrading and maintenance of existing facilities that supports the tourism sector

Sukuk and economic growth: Evidence from panel data

An active and efficient capital market is crucial in accelerating economic growth in a modern market oriented economy.Capital market provides an alternative funding avenue for firms and government.Capital market instruments provide larger capital amounts as well as liquidity for investors.Sukuk, a relatively new capital market instrument is a certificate which represents the value of an asset.Modern sukuk emerged to fill a gap in the global capital market as an alternative investment.Islamic investors want to balance their equity portfolios with bond-like products.Because sukuk are asset -based securities and not debt instruments, they fit the bill.Presently,Sukuk have been the most active Islamic market instruments in capital markets.There is increasing demand for sukuk instrument in the Islamic countries as well as the rest of the world as an alternative to conventional bonds.Sukuk can promote productive projects through the efficient use of funds and improving the efficiency of resources allocation.At the same time, Sukuk can sustain economic growth, expand employment and reduce poverty. However, the relationship between sukuk and economic growth is still a controversial issue.Therefore,the main motivation of this paper is to investigate the relationship between sukuk and economic growth by employing panel data econometrics technique. Interestingly, the result reveals that sukuk significantly affect and contribute to economic growth.Islamic capital markets in general and sukuk in particular can promote economic growth

The cointegration and causality tests for tourism and trade in Malaysia

This paper examines the relationship between tourism and trade that might have evolved in the development of Malaysian economy by using cointegration and causality tests. All analyses have been conducted with quarterly data of international tourism receipts, exports, imports and total trade of Malaysia, over the period of 1995:1 through 2006:4. The results of the unit root tests indicate that the data are stationary in first-difference and not in level. The results of the JJ co integration test however, show that all the series are not cointegrated in the long run, hence, long-run equilibrium did not exist between all the series. Using Granger-causality tests the study found that there is one-way causal effect (unidirectional causality) running from exports to international tourism receipts at 5% significance level. The causality test also shows a one-way causal effect running from imports to international tourist receipts at 5% significance level and total trade to international tourism receipts at 10% significance level. This leads to a conclusion that increase in total trade, exports and imports will cause growth in the tourism sector, which means that most of tourist arrivals are related to business tourism. Therefore, to increase and sustain in the growth of tourism sector, future economic policy should focus more on tourism and trade related, in order to generate more foreign exchange earning to Malaysi

Tourism and economic growth in Malaysia: Evidence from tourist arrivals from ASEAN-5 countries

This paper examined the causal relationship between tourism and economic growth in Malaysia by using panel time-series approach. Results from the panel cointegration analysis suggest the existence of cointegration between international tourism receipts and real economic growth.Results of the panel causality test based on the error correction model show Granger causality running from international tourism receipts to real economic growth indicating the existence of both short- and long-run relationship between the two.The results provide evidence of the significance contribution of tourism industry to Malaysia's economic growth justifying the necessity of public intervention in providing tourism infrastructure and facilities

Turizam i ekonomski rast u Maleziji: dokazi iz turističkih dolazaka iz ASEAN-5 zemalja

This paper examined the causal relationship between tourism and economic growth in Malaysia by using panel time-series approach. Results from the panel cointegration analysis suggest the existence of cointegration between international tourism receipts and real economic growth. Results of the panel causality test based on the error correction model show Granger causality running from international tourism receipts to real economic growth indicating the existence of both short- and long-run relationship between the two. The results provide evidence of the significance contribution of tourism industry to Malaysia’s economic growth justifying the necessity of public intervention in providing tourism infrastructure and facilities.Rad istražuje kauzalnu vezu između turizma i ekonomskog rasta u Maleziji koristeći panelne vremenske serije. Rezultati panelne kointegracijske analize upućuju na postojanje kointegracije između međunarodnih turističkih prihoda i realnog ekonomskog rasta. Rezultati panelnog kauzalnog testa baziranog na modelu korekcije pogrešaka pokazuju da Grangerova kauzalnost ide od međunarodnih turističkih prihoda prema realnom ekonomskom rastu ukazujući kako na kratkoročnu tako i na dugoročnu vezu među njima. Rezultati dokazuju važnost turizma za Malezijski ekonomski rast i opravdavaju potrebu javnih intervencija u svrhu osiguravanja turizmu potrebne infrastrukture i sadržaja

Carbon Dioxide (CO2) emission, energy consumption and economic growth: Evidence from selected Southeast Asia countries / Nur Hafizah Ismail … [et al.]

Southeast Asia countries have experienced rapid economic growth within the past decades with a significant increase in energy dependency and carbon dioxide (CO2) emissions. Continuous development in the urban area has stimulated a rise in energy consumption in many Southeast Asia countries, which resulted in an improvement of citizen's lifestyles and living standards due to increasing income and population. Understanding the relationship between economic growth, energy consumption, and carbon dioxide emissions help economies in formulating energy policies, enhancing energy security and developing a sustainable energy resource. Therefore, this study focuses on the economic growth, energy consumption and carbon dioxide emissions evolved in Southeast Asia by using Environment Kuznets Curve theory. This paper could be useful and beneficial for the Southeast Asia countries to form appropriate environmental policies to maintain the balance of energy demand and supply and to deal with environmental quality issues

Factors affecting demand for money in Japan / Norhidayu Rosli, Norsiah Kadir, Sabri Nayan and Norasyikin Abdullah Fahami

Demand for money is considered as an important function of stabilization and structural adjustment policies where such policies depend on the ability to adjust the money supply to its demand in order to prevent monetary disturbances from affecting real output. Monthly data from 2005 to 2012 for various monetary aggregates, consumer price index, industrial production index, and Bond are analysed. Global economic crisis and natural disaster as additional variables have been included in this study. The Pearson correlation tests, Unit root tests, Ordinary Least Square method and Granger Causality tests have been tested for empirical analysis. The results show the existence of the relationship among variables. Bidirectional causality found from CPI and Bond to monetary. All the five variables are significantly affecting the money demand in Japa

Post Keynesian Endogeneity of Money Supply: Panel Evidence

Post Keynesian economics is actually macroeconomics in a world of uncertainty and endogenous money. Post Keynesians posit that money supply in a market oriented production economy is endogenous or endogenously determined (rather than exogenous as claimed by Monetarists). Money supply is said to be endogenous if it is determined within the economic system itself. The present paper investigates this theory using a panel dataset of 177 countries from year 1970-2011 utilising dynamic panel data analysis and has found that money supply is endogenous as proposed by Post Keynesian theorists

Revisiting Energy Consumption and GDP: Evidence from Dynamic Panel Data Analysis

In recent years the issues of energy consumption and economic development have become the concern of many parties, particularly policy makers. The empirical outcomes of previous studies examining the relationship between energy consumption and economic growth have been inconclusive and conflicting due to different sample periods, variables used, countries studied and econometric techniques employed. Utilising dynamic panel data GMM-system estimator on datasets of selected 23 countries across 12 years ranging from 2000-2011, this paper shows evidence of uni-directional causality between energy consumption and GDP. In energy consumption model, the GDP is found to significantly determine energy consumption, whereas in the GDP model, energy consumption has however less significant effect on GDP. Energy price and investment are the other important determinants of energy consumption and income, respectively