Nonlinear ARDL estimation of tourism demand for Puerto Rico from the USA

Husein, Jamal; Kara, S. Murat

doi:10.1016/j.tourman.2019.103998

Cited by 34 publications

(14 citation statements)

References 8 publications

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“…Brida et al (2016) found a nonlinear relationship between air transport development and economic growth in the cases of Chile and Uruguay. Husein and Kara (2020) confirmed the existence of an asymmetric or nonlinear cointegration relationship between Puerto Rico's tourism demand and its determinants.…”

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confidence: 58%

The asymmetric impact of air transport on economic growth in Spain: fresh evidence from the tourism-led growth hypothesis

Balsalobre‐Lorente

Driha

Bekun

et al. 2020

Current Issues in Tourism

114

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The tourism sector has emerged as an essential driver for economic growth strategies during the last decades. An asymmetric long-run effect of air transport on economic growth is validated assuming a process of social globalization in Spain between 1970 and 2015. To achieve the study's objective, the recent asymmetric autoregressive distributed lag methodology framework advanced by Shin, Yu, and Greenwood-Nimmo ( 2014) is applied. For determining the causality direction, this methodology is applied in conjunction with the non-parametric causality test proposed by Diks and Panchenko (2006). The current study also accounts for the effects of renewable energy use and urbanization process over economic growth. Empirical results showed that air transport, urbanization process and social globalization exert positive and significant implications over economic growth, while renewable energy use reduces economic growth, as consequence of an energy mix sustained by fossil sources. Based on these outcomes several policy recommendations were offered in the concluding section. KEYWORDS Air transport renewable energy use social globalization tourism development economic growth cointegration analysisDuring the last decades, tourism has been a leading sector and engine of economic growth and development in both developing and developed economies (Akadiri, Akadiri, & Alola, 2019). This is because the increases in movement of tourists give a signal of development across the globe and this era of development has witnessed many ways through, which tourism can influence the economic activity of a country. This paper offers fresh evidence on the impact of air transport as a proxy for tourism on economic growth in Spain. Air transport is one of the major drivers of tourist movement and Spain is one of the top 10 destination earning most from activities in the tourism industry (WTTC, 2017[Q1]). Tourism contributes about 15% to gross domestic product (GDP) through several direct and indirect tourism activities (WTTC, 2017). Over the past few decades, Spain has been one of the most popular destinations for international tourists across the globe. Therefore, tourism is regarded as the third major contributor to the growth of the national economy of Spain after the industrial and the banking sectors contributing about 10% to 11% of GDP and also generating a substantial rate of employment. In 2018, Spain was regarded as the second most visited nation globally with a patronage of over 80 million tourists from different parts of the world (INE, 2019). This antecedence has drawn the attention of scholars recently to investigate the demand/determinant of tourism-led growth hypothesis (TLGH).Nevertheless, whether and how the expansion of the tourism industry affects the growth of the Spanish economy has been aThe asymmetric impact of air transport on economic growth in Spain: fresh evidence from the tourism-led growth hypothesis Recto running head : CURRENT ISSUES IN TOURISM Verso running head : D. BALSALOBRE-LORENTE ET AL. ABSTRACT1. Introductio...

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confidence: 58%

The asymmetric impact of air transport on economic growth in Spain: fresh evidence from the tourism-led growth hypothesis

Balsalobre‐Lorente

Driha

Bekun

et al. 2020

Current Issues in Tourism

114

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“…Therefore, based on the demand function; the tourism demand whether it is on travel and destination or the demand on particular tourism good and services it will be affected by price factors (price level of the destination country) and non‐price factors (socio‐ economics and demographic factors which includes income, population, quality of tourist services, tourist preference and so forth). This research augments the tourism demand model of Husein and Kara (2020)‐which assumes that tourism demand is determined by real GDP and price index or cost of tourism‐related transactions‐with the use of a financial development index. The specification is as follows:

{TOUDEX}_{it} = ξ_{0 i} {FINDEX}_{it} + ξ_{1 i} {RGDP}_{it} + ξ_{2 i} {CPI}_{it} + υ_{it},

where the TOUDEX is the tourism index which has been generated from principal component analysis on the data sets of tourism arrivals in billion and real tourism receipts in trillion dollars (2010 prices) as recommended by Shahzad, Shahbaz, Ferrer, and Kumar (2015).…”

Section: Methodsmentioning

confidence: 99%

Relationship between financial development and inbound tourism: A revisit

Al‐mulali

Solarin

Gholipour

2020

Journal of Public Affairs

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In this study, we use a more accurate and comprehensive indicator of financial development to examine the link between financial development and tourist arrivals and expenditures in the top 20 tourist destination countries over the period of 1995–2017. By applying the panel augmented mean group method and controlling for other determinants of tourist arrivals, the overall results revealed that financial development positively influences tourism development. On the contrary, economic growth and countries price levels have no significant effects on tourism development. At the country level results; financial development has positive effects on tourism development in most countries. However, gross domestic product growth and consumer price index have a significant in few countries only. Therefore, the outcome of this study reveals that that visitors do not consider the development and the price level of the country but rather the facilities available including the facilities in the financial structures.

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“…This paper augmented Amin's paper by using the exchange rate to examine how inbound tourism depends on the exchange rate. This is because if the exchange rate is higher or depreciates, that will make a country's tourism cheaper than the competing countries (Ertugrul and Mangir, 2015;Husein and Kara, 2020).…”

Section: Methodsmentioning

confidence: 99%

“…The study has found that an addition to the tourist arrival would have a greater positive impact on growth than the negative effect due to a decrease in tourist arrival. Husein and Kara (2020) have utilized the same technique to examine the asymmetric impact of change in the United States income (real per capita GDP) on tourism demand for Puerto Rico. The study has revealed a nonlinear relationship in which any change in the U.S.'s income has distinct effects on Puerto Rico's tourism (For details see the table in the Appendix Table 1) Due to the outbreak of COVID-19 in December 2019, the tourism sector has been badly affected around the world.…”

Section: Introductionmentioning

confidence: 99%

Tourism Development and Economic Growth in Bangladesh: New Evidence From Nonlinear Autoregressive Distributed Lag

Khan

Amin

Ahmed

et al. 2021

IJEFI

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We examine the long-run relationship between tourism development and economic growth using the Nonlinear Autoregressive Distributed Lag (NARDL) model for Bangladesh using annual data from 1980 to 2016. We find an asymmetric relationship between tourism and Bangladesh's economy since a 1% increase in tourism receipt increases economic growth by about 0.19%. On the contrary, due to a 1% decline in the tourism receipt, economic growth will decrease by about 0.66%. So, the decline in tourism receipt will have a higher negative impact on economic growth than the increase in the tourism receipt in Bangladesh, which result is important for current pandemic situation in tourism due to Covid-19. We also reveal that the impact of positive change in the tourism revenue on GDP stabilizes around 8 years; however, an adverse change on GDP does not stabilize in 15 years. We recommend that a systematic allocation of resources is required to promote and stimulate the tourism industry in Bangladesh for a favourable impact on the country's long-run economic development.

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Nonlinear ARDL estimation of tourism demand for Puerto Rico from the USA

Cited by 34 publications

References 8 publications

The asymmetric impact of air transport on economic growth in Spain: fresh evidence from the tourism-led growth hypothesis

The asymmetric impact of air transport on economic growth in Spain: fresh evidence from the tourism-led growth hypothesis

Relationship between financial development and inbound tourism: A revisit

Tourism Development and Economic Growth in Bangladesh: New Evidence From Nonlinear Autoregressive Distributed Lag

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