Tourism development and economic growth in Asian countries: 1995-2012 / Nur Izyani Ismail

Tourism development is one of the important roles that influence the economic growth and stability. Tourism can be either domestic or international. International tourism has both upcoming and outgoing impacts on a country’s balance of payments. Today, tourism is one of the major sources of income for many countries in the world and affects the economy of both the source and host countries. Therefore, this study attempts to ascertain the relationship between the international tourist arrivals with selected macroeconomic variables namely GDP per capita, real interest rate and inflation rate. The panel data is used instead of time series data. In conducting this study, ten Asian countries with the period of eighteen years ranging from 1995 to 2012 has been used as the sample. This study employs regression model in order to investigate the relationship between the explanatory variables towards tourist arrivals. Findings showed that GDP per capita has a positive significant relationship whereas inflation rate has a negative significant relationship. But, real interest rate is not significant towards tourism development (number of international tourist arrivals). In addition, for future researchers, it is recommended to increase the number of in order to get an accurate result as the scope is small. Plus, it is suggested to add more independent variables such as real effective exchange rate, trade openness and foreign direct investment to get a valid and reliable result. Similar studies can be done by using different analysis instead of panel data approach.