Do shocks have permanent or transitory effects on tourist inflow? An application of stationarity test with structural breaks: evidence reexamined for Gilgit-Baltistan, Pakistan (original) (raw)
Related papers
International Journal of Economics and Empirical Research, 2016
Purpose: The prime objective of this study is to re-investigate the tourism-led growth hypothesis by accommodating structural breaks over the annual period 1988-2014 for Pakistan. This study used two measure of tourism development -tourist arrivals and tourism expenditure per capita to explore the relationship between tourism and economic growth. Methodology: The unit root problem is tested by applying Ng-Perron unit root test. However, Perron, (1997) single structural break and Clemente et al. (1998) double structural breaks unit root tests also employed. To examine the long relationship between tourism and economic growth, we applied newly invented Bayer-Hanck, (2013) combine cointegration approach in the presence of structural breaks. The robustness of combine cointegration approach is tested by Johansen cointegration technique. Further, VECM Granger causality is used to understand the direction of causality during structural shocks. Findings: We found all data series stationary ...
Do External Shocks Have a Permanent or a Transitory Effect on Thailand's Tourism Industry?
Tourism Analysis, 2011
Given the number and the frequency of external shocks encountered by Thailand in the last two decades, this study identifies the number and the location of the breaks and tests to determine whether the breaks have a transitory or a permanent effect on international tourist arrivals to Thailand for its top 10 source countries using both univariate and panel unit root tests with structural breaks. The findings suggest that break dates coincide with the Asian financial crisis, the September 11 attack, and the SARS and the bird flu outbreaks. The univariate unit root tests with structural breaks reject the null hypothesis of a nonstationarity in tourist arrivals from all countries. Furthermore, panel unit root tests with one and two structural breaks also reject the joint null hypothesis of a nonstationarity. These findings imply that external shocks have only a transitory effect on tourist arrivals and Thailand's tourism sector will return to its long-run equilibrium path.
Foreign tourist arrivals in India from major source countries: an empirical analysis
Routledge eBooks, 2020
The tourism industry is a significant contributor to the world economy and needs to be carefully evaluated for impact by influencing factors such as external shocks. Several practical implications are associated with the testing of the unit root hypothesis in the context of foreign tourist arrivals in India. For instance, if the unit root process is followed, it implies that shocks to foreign tourist arrivals are permanent in nature rather than temporary. This study employed a battery of time series unit root tests in an attempt to examine whether foreign tourist arrivals in India from 17 major source countries between 1981 and 2012 were permanently or temporarily affected by shocks. The empirical results of this study revealed that shocks to foreign tourist arrivals in India from eight source countries have only a temporary effect and shocks form rest of nine countries have permanent impact. It may therefore be concluded that the government should focus on long-term solutions for those eight source countries where the null hypothesis of unit root is rejected in order to promote international tourist arrivals rather than implementing temporary measures.
STRUCTURAL BREAKS, TOURISM DEVELOPMENT AND ECONOMIC GROWTH: EVIDENCE FROM THAILAND
Our paper differs from previous studies by examining the issue of whether regime changes have broken down the stability of the long-run relationships between tourism development and real GDP in Taiwan for the 1959-2003 period. We empirically investigate the co-movements and the causal relationships among real GDP, tourism development, and the real exchange rate in a multivariate model. We use two different tourism variables-international tourism receipts and number of international tourist arrivals. To employ the unit root tests and the cointegration tests allowing for a structural break, the empirical evidence clearly shows that the causality between tourism and economic growth is bi-directional. Lastly, the international and cross-strait political change, economic shocks, and the relaxing of some tourism control and policies would break down the stability of the relationships between tourism development and economic growth. Overall, we do find the structural breakpoints, and they look to match clearly with the corresponding critical economic, political, or tourist incidents.
Asia Pacific Journal of Tourism Research, 2009
International visitor arrivals from Malaysia's ten major source markets are examined using Lagrange Multiplier (LM) unit root tests with one and two structural breaks to ascertain if shocks to the time path of tourist arrivals are permanent or transitory. The LM unit root test with one break is able to reject the unit root null for between 60 per cent of source markets where the break is specified as in the intercept and 90 per cent of source markets where the break is specified as in the intercept and slope. The LM unit root test with two breaks is able to reject the unit root null for all source markets, irrespective of how the break is specified. This result suggests that the effects of shocks on the growth path of tourist arrivals to Malaysia from its major markets are only transitory and that Malaysia's tourist sector is sustainable in the long run. While the effects of shocks are not permanent we do find that following shocks the growth in tourist arrivals from Malaysia's source markets have generally slowed. This result suggests there is a need to reduce the negative effects of slower growth in the recovery phase.
Are Shocks to Turkey’s Tourist Arrivals Permanent?
2016
In recent years, Turkey has experienced economic crises, terrorist incidents and natural disasters. This study investigates whether these shocks have temporary or permanent effects on visitor arrivals. Random walk hypothesis asserts that a series is a non-stationary or a unit root process. If visitor arrivals are characterized by a unit root, it implies that shocks to visitor arrivals are permanent. If visitor arrivals series not include a unit root process, this implies that shocks to visitor arrivals are temporary. In this study, the “random walk hypothesis” is tested for visitor arrivals to Turkey during 1996-2014 using Im et al. (2003) panel unit root test. IPS test results allow rejecting the random walk hypothesis, implying that shocks to visitor arrivals to Turkey from the 15 major source countries between 1996 and 2014 have a temporary effect on visitor arrivals.
Is Tourism in Lebanon Subject to Permanent or Transitory Exogenous Shocks?
Tourism Analysis, 2014
The tourism industry makes a significant contribution to Lebanese gross domestic product (GDP). Lebanon has been rocked by political instability and regional conflicts over the past several decades. These exogenous shocks can adversely affect visitor arrivals. Using monthly data from 2008 to 2013, this article attempts to identify some statistically significant shocks to visitor arrivals to Lebanon and their nature (i.e., whether or not the impact of the shocks was temporary). The empirical analysis based on univariate as well as panel unit root testing procedures, where structural breaks are endogenously determined, suggests that at least one exogenous shock has significantly affected tourist arrivals to Lebanon. However, in overall terms, the impact of these shocks on visitor arrivals has been temporary.
Are external shocks permanent or transitory? An analysis of visitor arrivals to Thailand
2010
Tourism industry in Thailand has recently experienced several external shocks such as September 11 attacks, SARS outbreak, Bird Flu, Political unrest and the recent global financial crisis which may have a temporary or permanent impact on the number of visitor arrivals to the country. This paper conducts univariate and panel Lagrange Multiplier tests with a break proposed by Lee and Strazicich (2004) and Im, Lee, and Tieslau (2005) to identify the time of the structural break and to determine whether shocks to visitor arrivals to Thailand have a temporary or permanent impact. We use annual data for Thailand's top ten source markets
Review of Education, Administration & Law
The tourism sector has achieved considerable importance over time in Pakistan as it makes indirect profits that increase foreign trade, public infrastructure, and foreign direct investment. Pakistan has massive potentials in the tourism sector. The present study analyzes the nexus between tourism and economic growth in Pakistan by using the Gregory Hansen co-integration and ARDL structural break econometrics approach on annual data from 1985 to 2020. The findings obtained through Gregory-Hansen's approach showed that structural break had appeared in the year 2009. For estimating the long-run coefficients structural break ARDL approach has been used. The study shows that tourism receipts significantly escalate economic growth. Furthermore, labor force participation and gross capital formation significantly and positively impacts the economic growth. The study recommends that Pakistan should pay proper attention to the tourism industry to promote allied sectors for achieving highe...
Persistency in tourism expenditure in a small-open economy
Anatolia an international journal of tourism and hospitality, 2017
This study aims to examine whether the shocks to the Turkish tourism have a permanent or a transitory effect on tourism expenditure for the period 1964-2012. We took the structural break periods from Lumsdaine and Papell (LP) unit-root test as a base and implemented the Augmented Dickey-Fuller unit-root test for the three different sub-periods of the series of tourism expenditure. In this study, we also estimated the measure of half-life for the effects of shocks on the series under consideration and the grid-bootstrap method to estimate confidence intervals. The results show, irrespective of the structural breaks, the effect of shocks on tourism expenditure is persistent; however, considering the structural breaks, the effect of shocks on tourism expenditure is transitory.