IDEAS home Printed from https://ideas.repec.org/a/pet/annals/v9i3y2009p163-184.html
   My bibliography  Save this article

Thailand’s International Tourism Demand: The ARDL Approach to Cointegration

Author

Listed:
  • Prasert Chaitip

    (Chiang Mai University, Thailand)

  • Chukiat Chaiboonsri

    (Bangalore University, India)

Abstract

This paper sought to find the short-run and long-run relationships between international tourist arrivals in Thailand and economic variables such as GDP, the price of goods and services, transportation costs, temperature of Thailand and both the exchange rate and exchange rate risk for the period from 1997(Q1)-2005(Q2). The cointegration techniques used were based on the ARDL approach to cointegration (developed by Pesaran and Pesaran (1997), Pesaran and Smith (1999) and Pesaran et al. (2001)) of Thailand’s international tourism demand and error correction mechanisms were used to find the short-run relationships of Thailand’s international tourism demand. This paper used the full six standard method test for unit root tests such as ADF-Test (1979), PP-Test (1997,1999), KPSS-Test (1992), DF-GLS Test (1996), the ERS Point Optimal Test and Ng and Perron (2001). The full six standard method test for unit root test have not previously been used to test unit roots for estimating tourism demand models based on ARDL approach to cointegration as well as this method for analyzing the long-run relations when the variables are of mixed-order of integration, i.e., I(0) and I(1). The long-run results indicate that growth in income (GDP) of Thailand’s major tourist source markets has a positive impact on international visitor arrivals to Thailand while transportation cost and both exchange rate and exchange rate risk have a negative impact on international visitor arrivals to Thailand. The findings were consistent with economic theory and the implications of the model can be used for policy making. Finally, the temperature of Thailand mostly has a negative impact on international visitor arrivals to Thailand.

Suggested Citation

  • Prasert Chaitip & Chukiat Chaiboonsri, 2009. "Thailand’s International Tourism Demand: The ARDL Approach to Cointegration," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 9(3), pages 163-184.
  • Handle: RePEc:pet:annals:v:9:i:3:y:2009:p:163-184
    as

    Download full text from publisher

    File URL: http://upet.ro/annals/economics/pdf/2009/20090316.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Marashdeh, Hazem, 2005. "Stock Market Integration in the MENA Region: An Application of the ARDL Bounds Testing Approach," Economics Working Papers wp05-27, School of Economics, University of Wollongong, NSW, Australia.
    2. Pesaran, M. H. & Shin, Y. & Smith, R. J., 1996. "Testing for the 'Existence of a Long-run Relationship'," Cambridge Working Papers in Economics 9622, Faculty of Economics, University of Cambridge.
    3. KIHANGIRE Asiimwe David & MUGYENYI Albert, 2005. "Is Inflation Always And Everywhere A Non-Monetary Phenomenon: Evidence From Uganda," International Finance 0508011, University Library of Munich, Germany.
    4. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    5. Paresh Narayan & Russell Smyth & Mohan Nandha, 2004. "Interdependence and dynamic linkages between the emerging stock markets of South Asia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 44(3), pages 419-439, November.
    6. Shrestha, M.B. & Chowdhury, K., 2005. "A Sequential Procedure for Testing Unit Roots in the Presence of Structural Break in Time Series Data: An Application to Quarterly Data of Nepal, 1970-2003," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 2(2), pages 31-46.
    7. Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107.
    8. Shrestha, Min B. & Chowdhury, Khorshed, 2005. "Sequential Procedure for Testing Unit Roots in the Presence of Structural Break in Time Series Data," Economics Working Papers wp05-06, School of Economics, University of Wollongong, NSW, Australia.
    9. Ian Babetskii & Balázs Égert, 2005. "Equilibrium Exchange Rate in the Czech Republic: How Good is the Czech BEER?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 55(5-6), pages 232-252, May.
    10. Kremers, Jeroen J M & Ericsson, Neil R & Dolado, Juan J, 1992. "The Power of Cointegration Tests," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 325-348, August.
    11. Chukiat Chaiboonsri & Prasert Chaitip & N. Rangaswamy, 2009. "Modelling International Tourism Demand in Thailand," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 9(3), pages 125-146.
    12. Julide Yildirim & Selami Sezgin, 2003. "Military expenditure and employment in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(2), pages 129-139.
    13. Paresh Kumar Narayan & Seema Narayan, 2006. "Savings behaviour in Fiji: an empirical assessment using the ARDL approach to cointegration," International Journal of Social Economics, Emerald Group Publishing, vol. 33(7), pages 468-480, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chukiat Chaiboonsri & Prasert Chaitip & N. Rangaswamy, 2008. "A Panel Unit Root and Panel Cointegration Test of the Modeling International Tourism Demand in India," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 8(1), pages 95-124.
    2. Prasert Chaitip & Chukiat Chaiboonsri, 2009. "A Panel Cointegration Analysis: Thailand’s International Tourism Demand Model," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 9(1), pages 129-142.
    3. Kurtovic, Safet & Halili, Blerim & Maxhuni, Nehat, 2016. "Bilateral Trade Elasticity: B&H versus its seven trade partners," MPRA Paper 72297, University Library of Munich, Germany.
    4. Musallam Abedtalas, 2015. "The Determinants of Tourism Demand in Turkey," Journal of Economics and Behavioral Studies, AMH International, vol. 7(4), pages 90-105.
    5. Ruxandra-Irina POPESCU & Rãzvan-Andrei CORBOª, 2013. "€Œamazing Thailand €“ Its Contribution To Growing The Country’S Competitiveness," Proceedings of Administration and Public Management International Conference, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 9(1), pages 220-234, June.
    6. repec:rom:campco:v:9:y:2013:i:1:p:220-234 is not listed on IDEAS
    7. Akarapong Untong & Vicente Ramos & Mingsarn Kaosa-Ard & Javier Rey-Maquieira, 2014. "Thailand's Long-Run Tourism Demand Elasticities," Tourism Economics, , vol. 20(3), pages 595-610, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marashdeh, Hazem, 2005. "Stock Market Integration in the MENA Region: An Application of the ARDL Bounds Testing Approach," Economics Working Papers wp05-27, School of Economics, University of Wollongong, NSW, Australia.
    2. Khorshed Chowdhury, 2011. "Dynamics, Structural Breaks and the Determinants of the Real Exchange Rate of Australia," Economics Working Papers wp11-11, School of Economics, University of Wollongong, NSW, Australia.
    3. Constantinos Alexiou & Persefoni Tsaliki & Hashim Rasha Osman, 2014. "Institutional Quality And Economic Growth: Empirical Evidence From The Sudanese Economy," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 59(203), pages 119-138, October –.
    4. Min Shrestha & Khorshed Chowdhury, 2007. "Testing financial liberalization hypothesis with ARDL modelling approach," Applied Financial Economics, Taylor & Francis Journals, vol. 17(18), pages 1529-1540.
    5. Sulaiman, Saidu & Masih, Mansur, 2017. "Is liberalizing finance the game in town for Nigeria ?," MPRA Paper 95569, University Library of Munich, Germany.
    6. Arize, Augustine C., 2017. "A convenient method for the estimation of ARDL parameters and test statistics: USA trade balance and real effective exchange rate relation," International Review of Economics & Finance, Elsevier, vol. 50(C), pages 75-84.
    7. Tuck Cheong Tang, 2008. "Money demand function for Southeast Asian countries," Journal of Economic Studies, Emerald Group Publishing, vol. 34(6), pages 476-496, January.
    8. Hwang, Jen-Te & Wen, Min, 2024. "Electronic payments and money demand in China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 47-64.
    9. James Obben & Monique Waayer, 2011. "New Zealand's old‐age pension scheme and household saving," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 38(9), pages 767-788, August.
    10. Roger Perman & David I. Stern, 2003. "Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(3), pages 325-347, September.
    11. Natalya Ketenci & Idil Uz, 2011. "Bilateral and regional trade elasticities of the EU," Empirical Economics, Springer, vol. 40(3), pages 839-854, May.
    12. Mohammad Abdul Munim Joarder & A. K. M. Nurul Hossain & Monir Uddin Ahmed, 2016. "Does the central bank contribute to the political monetary cycles in Bangladesh?," Economic Change and Restructuring, Springer, vol. 49(4), pages 365-394, November.
    13. Chowdhury, Khorshed, 2012. "Modelling the dynamics, structural breaks and the determinants of the real exchange rate of Australia," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(2), pages 343-358.
    14. Gulzar Ali & Said Zamin Shah & Ghulam Mustafa, 2019. "Testing the Reliability and Existence of IS-LM Model for Pakistan," Global Economics Review, Humanity Only, vol. 4(2), pages 13-23, June.
    15. Arun Narayanasamy & Humnath Panta & Rohit Agarwal, 2023. "Relations among Bitcoin Futures, Bitcoin Spot, Investor Attention, and Sentiment," JRFM, MDPI, vol. 16(11), pages 1-24, November.
    16. Mohammad Monjurul Hoque & Zulkornain Yusop, 2012. "Impacts of Trade Liberalization on Export Performance in Bangladesh: An Empirical Investigation," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 13(2), pages 207-239, September.
    17. Muhammad Omer & Jakob De Haan & Bert Scholtens, 2015. "An empirical analysis of excess interbank liquidity: a case study of Pakistan," Applied Economics, Taylor & Francis Journals, vol. 47(44), pages 4754-4776, March.
    18. Tang, Chor Foon & Tan, Eu Chye, 2013. "Exploring the nexus of electricity consumption, economic growth, energy prices and technology innovation in Malaysia," Applied Energy, Elsevier, vol. 104(C), pages 297-305.
    19. Hamid Raza & Gylfi Zoega & Stephen Kinsella, 2015. "Capital controls, financial crisis and the investment saving nexus:Evidence from Iceland," Working Papers 201518, Geary Institute, University College Dublin.
    20. Brittle, Shane, 2009. "Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia," Economics Working Papers wp09-10, School of Economics, University of Wollongong, NSW, Australia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pet:annals:v:9:i:3:y:2009:p:163-184. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Imola Driga (email available below). General contact details of provider: http://www.upet.ro/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.