The Role of Real Exchange Rates in the Relationship between Tourist Arrival and Economic Growth: An Asymmetric Perspective from Malaysia

Abstract

The aim of this chapter is to examine the role of real exchange rates in the relationship between tourist arrival and economic growth in Malaysia over the period of 2000–2018. We disaggregate Malaysian tourists into six geographical regions, namely Asia, Singapore, Europe, Pacific region, Americas, and Africa. Using a non-linear autoregressive distributed lag model, we find that the appreciation of real exchange rates with positive growth of economy plays a prominent role in influencing international tourist arrivals from Singapore, other Asian countries, Pacific region, Europe, and Americas. Our study suggests that real appreciation is important in providing some insights into the effectiveness of growth-led-tourism policies. In line with this, some implications are provided at the end of this chapter.

Citation

Go, Y.-H. and Ng, C.-F. (2022), "The Role of Real Exchange Rates in the Relationship between Tourist Arrival and Economic Growth: An Asymmetric Perspective from Malaysia", Lee, C.-F. and Yu, M.-T. (Ed.) Advances in Pacific Basin Business, Economics and Finance (Advances in Pacific Basin Business, Economics and Finance, Vol. 10), Emerald Publishing Limited, Leeds, pp. 173-191. https://doi.org/10.1108/S2514-465020220000010009