Regime-Switching Effect of Tourism Specialization on Economic Growth in Asia Pacific Countries

Wei-Ying Sung,Wen-Guu Lei,Geng-Nan Chiang

doi:10.3390/economies5030023

Wei-Ying Sung, Wen-Guu Lei + Show 1 more

Open Access

https://doi.org/10.3390/economies5030023

Copy DOI

Journal: Economies	Publication Date: Jun 27, 2017
Citations: 11	License type: CC BY 4.0

Affiliation: National Sun Yat-sen University, Feng Chia University

Abstract

In the past 30 years, many studies have focused on exploring the relationship between tourism development and economic growth. However, there has been no consensus reached concerning of the relationship. This study will attempt to clarify the relationship between tourism development and economic growth. The purpose of this study is to analyze the relationship between tourism development and economic growth. This study applies the Panel Smooth Transition Regression Model (PSTR) proposed by Gonzalez et al. (2005) to investigate the regime-switching effect of tourism specialization on economic growth in Asia Pacific countries over the period 1996–2009. The results are as follows: (a) there were regime-switching effects of tourism specialization on economic growth; (b) the tourism specialization on economic growth has a better explanation for the effects of non-linear PSTR than linear PLS (Panel Least Squares); (c) in medium degree of tourism specialization countries (the value is between 0.0123~0.01663), tourism development has a significantly positive influence on economic growth, but consumption ability and investment ratios have a significantly negative influence on economic growth; (d) in low or high degree of tourism specialization countries (the value is below 0.0123 or above 0.01663), tourism development has a reduced influence on economic growth, and significantly positive influence on consumption ability and investment ratios. On the basis of these results, this study presents policy recommendations and areas for future research.

Highlights

The results are as follows: (a) there were regime-switching effects of tourism specialization on economic growth; (b) the tourism specialization on economic growth has a better explanation for the effects of non-linear Panel Smooth Transition Regression Model (PSTR) than linear Panel Data Least Squares Regression (PLS) (Panel Least Squares); (c) in medium degree of tourism specialization countries, tourism development has a significantly positive influence on economic growth, but consumption ability and investment ratios have a significantly negative influence on economic growth; (d) in low or high degree of tourism specialization countries, tourism development has a reduced influence on economic growth, and significantly positive influence on consumption ability and investment ratios
This study found that most studies have used a linear model to explore the relationship between tourism development and economic growth; few studies have adopted a non-linear model for their examination
The authors of this study found that the relationship between tourism development and economic growth can be divided into three categories, as follows

Summary

Introduction

With the number of global tourists up to 279 million and international tourism receipts reaching 418 billion US dollars in 2015. Economies 2017, 5, 23; doi:10.3390/economies5030023 www.mdpi.com/journal/economies (World Tourism Organization 2016), Asia Pacific countries have become the key indicators for global tourism development and economic growth. Many countries take tourism development into account when making important policies on economic growth (Chou 2013; Chen and Chiou-Wei 2009; Oh 2005). More and more researchers have recently begun to examine the relationship between tourism development and the overall economic growth of a country (Chou 2013; Chen and Chiou-Wei 2009; De Vita and Kyaw 2016a; Dritsakis 2012; Lee and Chang 2008; Wang 2012a)

Objectives

Methods

Findings

Conclusion