Impact of economic policy on international tourism demand: the case of Abenomics

Abstract

Since the 2008 global financial crisis and resulting recession, many countries have been following unconventional monetary policies. Little information is known on how these policies may influence tourism demand. This study starts to fill this gap by investigating the impact of the Japanese economic policy known as Abenomics on South Koreans' travel to Japan, the largest inbound market for Japan. Per capita gross domestic product, relative prices, and exchange rates are significant determinants of Japanese inbound tourism. As these variables have been influenced by Abenomics, one can infer that Abenomics is associated with a significant increase in tourist arrivals from South Korea. Findings highlight the importance of government economic policy in stimulating international tourism demand through its impact on the economy.

Tourism demand analysis: The impact of the economic policy uncertainty on the arrival of Japanese tourists to the USA

“…In addition, our finding for the negative impact of the economic policy uncertainty is also in line with the previous findings of Dragouni et al () and Gozgor and Ongan (). Our results for the economic policy uncertainty somehow relate to the findings by Boukas and Ziakas (), Eugenio‐Martin and Campos‐Soria (), Kim et al (), Ritchie et al (), and Song and Lin () because they observe the negative effects of the global financial crisis of 2008–2009 on the international tourism demand.…”

“…10 We allow the multiple breaks, and although the estimated break dates are automatically determined by the cointegration procedure, they are related to the 9/11 attacks, the global financial crisis of 2008-2009, and the begging of the election process that causes to change in the economic policies in Japan known as the Abenomics. Refer to Kim et al (2016) for the details of the Abenomics. 11 We also implement a formal F test to determine a model.…”

“…Using the regional data from 27 European Union (EU) countries, Eugenio‐Martin and Campos‐Soria, () demonstrate the negative impact of the global financial crisis of 2008–2009 on the tourism expenditures. Finally, Kim, Lee, and Mjelde () examine the determinants of inbound tourists from South Korea to Japan for the period from 2000Q1 to 2015Q2. The paper specifically focuses on various uncertainty measures, such as the risks due to the Fukushima nuclear disaster in 2011Q1, the Severe Acute Respiratory Syndrome outbreak over the period 2002Q4–2003Q2, and the global financial crisis of 2008–2009 over the period 2008Q3–2009Q4.…”

“…According to the authors, not only the structural reforms, but also the fiscal and the monetary stimulus in the Abenomics era can indirectly affect the tourism development via the channel of raising economic growth. On the other hand, the unconventional monetary easing in the Abenomics era also causes to the depreciation of the Japanese Yen (JPY), and this reduces the travel costs (see figure 2 in Kim et al, ). According to the results of the paper, not only the per capita gross domestic product (GDP) and the real exchange rate between two related countries, but also the economic policies in the Abenomics era and the global financial crisis of 2008–2009 significantly affect the inbound tourists from South Korea to Japan.…”

Nonlinear Impact of Air Quality on Tourist Arrivals: New Proposal and Evidence

“…The variable GDPP denotes GDP per capita (in Chinese Yuan) and is a city’s economic output per person measured in the base year (2001) prices, which reflects one of economic resources a city can exploit to develop its tourism economy. GDPP is supposed to be positively related to tourist arrivals (Kim, Chen, and Jang 2006; Kim, Lee, and Mjelde 2018). The data on GDP per capita and population is obtained from China City Statistical Yearbook.…”