International Journal of Business and Social Science
Vol. 2 No. 17
An Analysis of the Relationships between Tourism Development and Foreign Direct Investment: An Empirical Study in Selected Major Asian Countries
Norlida Hanim Mohd Salleh School of Economics Faculty of Economics and Management Universiti Kebangsaan Malaysia, 43600 Bangi, MALAYSIA Email: firstname.lastname@example.org, Phone: 013-3153812 Redzuan Othman* School of Economics Faculty of Economics and Management Universiti Kebangsaan Malaysia, 43600 Bangi, MALAYSIA *Corresponding Author Email: email@example.com, Phone: 0135339006 Tamat Sarmidi School of Economics Faculty of Economics and Management Universiti Kebangsaan Malaysia, 43600 Bangi, MALAYSIA Email: firstname.lastname@example.org, Phone: 0133949116 Abstract
This study analyses the relationship between the development of tourism industry (ARR) and foreign direct investment (FDI) in selected Asian countries namely Malaysia, Singapore, Thailand, China and Hong Kong utilizing autoregresive distributed lag approach (ARDL.) This approach allows the usage of stationary data at various levels, i.e. I(1) and I(0) and may be applied on small sample size and provide the long and short-run empirical results simultaneously. The result indicates that there is cointegration/long-run relationship between variables for all countries under study. However, the ARR is found to be more significant as compared to the FDI in affecting dependent variables, besides being more elastic. In the short run, it is found that Hong Kong has a bidirectional relationship between the ARR and FDI. As for Malaysia and Thailand, there is a unidirectional relationship between ARR and FDI; while for Singapore and China, there is no relationship between these two variables.
Keywords: Asian countries, cointegration, tourism industry, foreign direct investment 1. Introduction
Tourism is now becoming one of the leading industries in many countries. It is mainly due to its major...