Abstract
The paper uses monthly data on tourism related factors from April 2005–June 2016 for Taiwan that applies factor analysis and Chang’s (2015) novel approach for constructing a tourism financial indicator, namely the Tourism Financial Conditions Index (TFCI). The TFCI is an adaptation and extension of the widely-used Monetary Conditions Index (MCI) and Financial Conditions Index (FCI) to tourism stock data. However, the method of calculation of the TFCI is different from existing methods of constructing the MCI and FCI in that the weights are estimated empirically. The empirical findings show that TFCI is statistically significant using the estimated conditional mean of the tourism stock index returns (RTS). Granger Causality tests show that TFCI shows strong feedback on RTS. An interesting insight is that the empirical results show a significant negative correlation between F1_visitors (Foreign Visitor Arrivals) and RTS, implying that tourism authorities might promote travel by the “rich”, and not only on inbound visitor growth. The use of market returns on the tourism stock sub-index as the sole indicator of the tourism sector, as compared with the general activity of economic variables on tourism stocks, is shown to provide an exaggerated and excessively volatile explanation of tourism financial conditions.
Highlights
Despite political upheaval, economic uncertainty and natural disasters around the world in recent years, the global travel, tourism and hospitality industry, which is one of the world’s leading industries in both economic and financial terms, has experienced continued growth
This paper proposes unbiased and consistent estimation of Tourism Financial Conditions Index (TFCI) in Equations (3) and (5) by Ordinary Least Squares (OLS), with consistent Newey-West HAC standard errors to accommodate the possibility of serial correlation and heteroskedasticity in the errors in Equation (5)
The descriptive statistics of the estimated monthly TFCI from Equation (5) are given in the last column of Table 2, where the fitted value from the regression model are given as column of Table 2, where the fitted value from the regression model are given
Summary
Economic uncertainty and natural disasters around the world in recent years, the global travel, tourism and hospitality industry, which is one of the world’s leading industries in both economic and financial terms, has experienced continued growth. Tourism Organization (UNWTO), international tourist arrivals worldwide have more than doubled since 1990, rising from 435 million to 675 million in 2000, to 940 million in 2010, growing by a further. 4% in 2012 to reach 1.035 billion, and increasing by 4.4% in 2015 with a record of 1.184 billion. 2015 marks the sixth consecutive year of above-average growth, with international arrivals increasing by. 4% or more every year since the post-crisis year of 2010 Organization, UNWTO/WWW2.unwto.org/About/Annual Report/UNWTO Annual Report 2015 http://www2.unwto.org/publication/unwto-annual-report-2015). 4% in 2012 to reach 1.035 billion, and increasing by 4.4% in 2015 with a record of 1.184 billion. 2015 marks the sixth consecutive year of above-average growth, with international arrivals increasing by
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
