Theoretical and Applied Economics
No. 1 / 2018 (614), Spring
Does exchange rate always affect the number of inbound tourists significantly in China?
Qingdao Huanghai University, China
Hsu-Ling CHANG
Ling Tung University, Taichung, Taiwan
Chi-Wei SU
Ocean University of China, China
Abstract. This investigation examines the time-varying causality between the exchange rate and the number of the inbound tourism of China using the rolling window estimation. The full-sample causality test suggests no causality between the exchange rate and the number of inbound tourists. However, the parameter stability test revels that this causality is unstable, which suggests that fullsample causality tests cannot be relied upon. Then, we use a time-varying rolling window approach to revisit the dynamic causality, and the results show that the exchange rate has an increasing impact on the number of inbound tourism since 2009, which is consist with the continuous market process of the Renminbi exchange rate. Our result proves that inbound tourists will be more concern about the exchange rate with the expansion of the currency's trading band. The rolling window test reveals that inbound tourism factors should be taken into consideration by China’s government with the development of the tourism industry and the marketization of the exchange rate.
Contents
Political economy map – A useful tool for public policy decision makers
Macroeconomic uncertainty and FDI in developing countries
Impact of foreign direct investment inflows on tax revenues in OECD countries: A panel cointegration and causality analysis
Macroprudential stability indicators of financial systems: Analysis of Bosnia and Herzegovina and Croatia
Does exchange rate always affect the number of inbound tourists significantly in China?
The effects of Turkish-Russian political relations on bilateral trade balance: Cointegration and causal analysis
The relationship between financial deepening and economic growth: Bootstrap causality approach for the selected upper middle income countries
Financial development, trade openness and growth in India
The impact of carbon dioxide (CO2) emissions on tourism: Does the source of emission matter?
Effect of exchange rate policy on GDP and GDP components: The Kyrgyz Republic Case
Dynamic linkages between corruption, economic growth, and income inequality in Pakistan: Say ‘No’ to corruption
Impact of defence expenditures on external debt: An econometric analysis for Turkey and Turkic Republics