Analyzing the effects of economic factors on modeling the diffusion of foreign exchange earnings from tourism in Taiwan

Abstract

While promoting the country’s tourism industry, governments devote significant resources to support the overall economy. In other words, nations’ macroeconomic factors play an important role in governments’ development of tourism industry. This research note focuses on the effects of economic factors that influence the development of tourism industry and foreign-exchange earnings from tourists in Taiwan using a logistics growth curve. The empirical results show that the logistics growth curve has high explanatory power and that macroeconomic factors (gross domestic product and exchange rate) have significant effects on foreign-exchange earnings from tourists. This research note’s contribution to understanding foreign-exchange earnings from tourism lies in the evidence it provides that the logistics growth curve can help in the estimation of expected average consumption per tourist in the longer term.