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A bound test approach to cointegration of tourism demand

Problem statement: Given the high contribution of tourism industry in the Malaysian economy, Malaysia has a vast view to increase its market share of the international tourist arrivals in the Asia Pacific region. Therefore, this study attempts to investigate the long run and short run demand for tou...

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Main Authors: Habibi, Fateh, Abdul Rahim, Khalid
Formáid: Article
Teanga:English
Foilsithe: Science Publications 2009
Rochtain Ar Líne:http://psasir.upm.edu.my/id/eprint/12650/1/ajassp.2009.1924.1931.pdf
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spelling oai:psasir.upm.edu.my:12650 http://psasir.upm.edu.my/id/eprint/12650/ A bound test approach to cointegration of tourism demand Habibi, Fateh Abdul Rahim, Khalid Problem statement: Given the high contribution of tourism industry in the Malaysian economy, Malaysia has a vast view to increase its market share of the international tourist arrivals in the Asia Pacific region. Therefore, this study attempts to investigate the long run and short run demand for tourism from top ten markets (country). Approach: To accomplish this objective the ARDL bound test approach to cointegration was carried out for quarterly time series data from 1998:Q1 to 2007: Q3. A three-stage procedure followed to test the direction of causality. In the first stage the order of integration was tested using the Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) unit root tests. The second stage involved testing for the existence of a long-run equilibrium relationship between arrivals, income, tourism price, tourism substitute price and travel cost. The third stage involved constructing standard Granger-type causality tests augmented with a lagged error-correction term where the series were cointegrated. Results: The result of ADF and PP unit root tests confirmed that all variables were stationary at first difference. In addition the results indicated that a long run relationship and between variables. Conclusion: The results indicated that tourists from these ten countries seem to be highly sensitive to the price and the alternative destinations are complementary to Malaysia. In addition the results showed that the outbreak of Severe Acute Respiratory Syndrome (SARS, 2003) had a negative affects significantly affected Malaysia. Science Publications 2009 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/12650/1/ajassp.2009.1924.1931.pdf Habibi, Fateh and Abdul Rahim, Khalid (2009) A bound test approach to cointegration of tourism demand. American Journal of Applied Sciences, 6 (11). pp. 1924-1931. ISSN 1546-9239; ESSN: 1554-3641 http://www.thescipub.com/abstract/?doi=ajassp.2009.1924.1931 10.3844/ajassp.2009.1924.1931
institution UPM IR
collection UPM IR
language English
description Problem statement: Given the high contribution of tourism industry in the Malaysian economy, Malaysia has a vast view to increase its market share of the international tourist arrivals in the Asia Pacific region. Therefore, this study attempts to investigate the long run and short run demand for tourism from top ten markets (country). Approach: To accomplish this objective the ARDL bound test approach to cointegration was carried out for quarterly time series data from 1998:Q1 to 2007: Q3. A three-stage procedure followed to test the direction of causality. In the first stage the order of integration was tested using the Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) unit root tests. The second stage involved testing for the existence of a long-run equilibrium relationship between arrivals, income, tourism price, tourism substitute price and travel cost. The third stage involved constructing standard Granger-type causality tests augmented with a lagged error-correction term where the series were cointegrated. Results: The result of ADF and PP unit root tests confirmed that all variables were stationary at first difference. In addition the results indicated that a long run relationship and between variables. Conclusion: The results indicated that tourists from these ten countries seem to be highly sensitive to the price and the alternative destinations are complementary to Malaysia. In addition the results showed that the outbreak of Severe Acute Respiratory Syndrome (SARS, 2003) had a negative affects significantly affected Malaysia.
format Article
author Habibi, Fateh
Abdul Rahim, Khalid
spellingShingle Habibi, Fateh
Abdul Rahim, Khalid
A bound test approach to cointegration of tourism demand
author_facet Habibi, Fateh
Abdul Rahim, Khalid
author_sort Habibi, Fateh
title A bound test approach to cointegration of tourism demand
title_short A bound test approach to cointegration of tourism demand
title_full A bound test approach to cointegration of tourism demand
title_fullStr A bound test approach to cointegration of tourism demand
title_full_unstemmed A bound test approach to cointegration of tourism demand
title_sort bound test approach to cointegration of tourism demand
publisher Science Publications
publishDate 2009
url http://psasir.upm.edu.my/id/eprint/12650/1/ajassp.2009.1924.1931.pdf
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score 13.4562235

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