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Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia

Tourism is one of the largest and fastest growing industries in the world, which makes it a potential strategic factor for economic growth. This adds to the strong interest in the role of tourism in Malaysia’s economic growth as it is the second-largest contributor to foreign exchange earnings after...

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Main Authors: Cheam Chai Li, Rosli Mahmood, Hussin Abdullah, Ong Soon Chuan
Format: Non-Indexed Article
Published: 2013
Online Access:http://discol.umk.edu.my/id/eprint/7834/
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spelling my.umk.eprints.78342022-05-23T10:23:04Z http://discol.umk.edu.my/id/eprint/7834/ Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia Cheam Chai Li Rosli Mahmood Hussin Abdullah Ong Soon Chuan Tourism is one of the largest and fastest growing industries in the world, which makes it a potential strategic factor for economic growth. This adds to the strong interest in the role of tourism in Malaysia’s economic growth as it is the second-largest contributor to foreign exchange earnings after manufacturing. In addition, empirical results associated with Granger causality among economic growth, tourism and exports within the neoclassical framework are inconsistent. The objectives of this study, thus, are to determine: the long-run relationship; the long-run and short-run Granger causality; and the long-run triangular Granger causality between economic growth and tourism receipts corresponding to selected macroeconomic variables such as government tourism expenditure, physical capital, education, health and exports as control variables. The long-run Granger causality in vector error correction model (VECM) shows economic growth, tourism receipts and health complement each other (bidirectional causality), while unidirectional causalities are found between government tourism expenditure, physical capital, education and exports to economic growth. In addition, enhancing physical capital, education, health, exports and government tourism expenditure precede tourism receipts; all these in turn indirectly lead to economic growth, thus witnessing triangular relationships among them. 2013 Non-Indexed Article NonPeerReviewed Cheam Chai Li and Rosli Mahmood and Hussin Abdullah and Ong Soon Chuan (2013) Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia. The Journal of Applied Economic Research, 7 (2). pp. 185-206.
institution Universiti Malaysia Kelantan
building Perpustakaan Universiti Malaysia Kelantan
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Kelantan
content_source UMK Institutional Repository
url_provider http://umkeprints.umk.edu.my/
description Tourism is one of the largest and fastest growing industries in the world, which makes it a potential strategic factor for economic growth. This adds to the strong interest in the role of tourism in Malaysia’s economic growth as it is the second-largest contributor to foreign exchange earnings after manufacturing. In addition, empirical results associated with Granger causality among economic growth, tourism and exports within the neoclassical framework are inconsistent. The objectives of this study, thus, are to determine: the long-run relationship; the long-run and short-run Granger causality; and the long-run triangular Granger causality between economic growth and tourism receipts corresponding to selected macroeconomic variables such as government tourism expenditure, physical capital, education, health and exports as control variables. The long-run Granger causality in vector error correction model (VECM) shows economic growth, tourism receipts and health complement each other (bidirectional causality), while unidirectional causalities are found between government tourism expenditure, physical capital, education and exports to economic growth. In addition, enhancing physical capital, education, health, exports and government tourism expenditure precede tourism receipts; all these in turn indirectly lead to economic growth, thus witnessing triangular relationships among them.
format Non-Indexed Article
author Cheam Chai Li
Rosli Mahmood
Hussin Abdullah
Ong Soon Chuan
spellingShingle Cheam Chai Li
Rosli Mahmood
Hussin Abdullah
Ong Soon Chuan
Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia
author_facet Cheam Chai Li
Rosli Mahmood
Hussin Abdullah
Ong Soon Chuan
author_sort Cheam Chai Li
title Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia
title_short Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia
title_full Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia
title_fullStr Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia
title_full_unstemmed Economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in Malaysia
title_sort economic growth, tourism and selected macroeconomic variables : a triangular causal relationship in malaysia
publishDate 2013
url http://discol.umk.edu.my/id/eprint/7834/
_version_ 1763303897442549760
score 13.211869

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