The Effects of Economic Factors on Tourism Demand for Malaysia: A Case of Asian and European Countries

This paper investigates the long-run relationship between the number of international tourist arrivals from the Asian and European countries and four selected variables using quarterly data from 1999 to 2014. Results of panel unit root test show all series are integrated of order one and there exist long-run panel cointegration among the elected variables. Based on Hausman test statistic, PMG is the appropriate estimator for estimating the relationship between tourism demand and the four variables. As expected, exchange rate, level of income, tourism price and substitute tourism price are important determinants for tourism demand in Malaysia. Generally, for both cases of Asian and European, the PMG estimates is very sensitive to lag order whereby high lag order gives larger impact compared to low lag order. The result of the optimal lag order model suggests that longer period of time will be taken for the tourism demand to converge to the long-run equilibrium. Thus the government and tourism authorities should continuously promoting Malaysia in order to sustain the growth of the industry.

کلیدواژه ها:

tourism demand ، pooled mean group ، error correction term ، sensitivity analysis