Moderation analysis of exchange rate, tourism and economic growth in Asia

Abstract

This study brings novelty to the tourism literature by re-examining the role of exchange rate in the tourism-growth nexus. It differs from previous tourism-led growth narrative to probe whether tourism exerts a positive effect on economic growth when the exchange rate is accounted for. Using a moderation modelling framework, instrumental variables general method of moments (IV-GMM) and quantile regression techniques in addition to real per capita GDP, tourism receipts and exchange rate, the study engages data on 44 Asian countries from 2010 to 2019. Results from the IV-GMM show that: (1) tourism exerts a positive effect on growth; (2) exchange rate depreciation hampers growth; (3) the interaction effect is positive but statistically not significant; and (4) results from EAP and SA samples are mixed. For the most part, constructive evidence from the quantile regression techniques reveals that the impact of tourism and exchange is significant at lower quantiles of 0.25 and 0.50 while the interaction effect is negative and statistically significant only for the SA sample. These are new contributions to the literature and policy recommendations are discussed.

Re-examining the tourism-led growth nexus and the role of information and communication technology in East Asia and the Pacific

“…CAP. INSTITUTIONS R & D HUMAN CAPITAL PSCC-LSDV Mean Regressions Q 0.25 Q 0.50 Q 0.75 Q 0.25 Q 0.50 Q 0.75 Q 0.25 Q 0.50 Q 0.75 [ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ] [ 6 ] [ 7 ] [ 8 ] [ 9 ] [ 10 ] [ 11 ] [ 12 ] lnGFCF −0.0248** −0.137*** −0.0912*** −0.040*** −0.048*** −0.054*** −0.195*** −0.177*** −0.154*** −0.142*** −0.127*** −0.100*** (-2.324) (-4.327) (-5.050) (0.014) (0.012) (0.012) (0.073) (0.052) (0.045) (0.023) (0.021) (0.023) lnLAB −0.169 <...…”

“…Existing studies have independently established a positive relationship between tourism and economic growth. That is, tourism is an enabler of growth [ [4] , [5] , [6] , [7] , [8] , [9] , [10] ]. Similarly, the growth-enhancing impact of ICT is well documented [ [11] , [12] , [13] , [14] , [15] , [16] ].…”

Fiscal Policy Option for Abatement of Free Rider Society: The Role of Institutional Quality in Nigeria

“…Adeleye BN, Ogede JS, Rabbani MR, Adam L S, Mazhar M Moderation analysis of exchange rate, tourism and economic growth in Asia. PLoS ONE 17 (12): https://doi.org/ 10.1371/ journal.pone.0279937 [43].…”

Growth-Led Tourism and the Role of Exchange Rate

“…The tourism industry contributes to economic growth in various ways. First, tourism is a form of the internal exchange rate in which foreign tourists consume the product of a domestic market that allows the country to pay for the primary raw materials and raw materials needed in the manufacturing process (Adeleye et al, 2022a). Second, it encourages governments and businesses to invest in new infrastructure and business areas, allowing local companies to compete with other resorts.…”