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Testing the Structural Break of Taiwan Inbound Tourism Markets

Author

Listed:
  • Jennifer C. H. MIN

    (Department of International Business, Ming Chung University, Taipei, Taiwan.)

  • Hsien-Hung KUNG

    (Department of Marketing and Distribution Management, Hsing Wu University, Taipei, Taiwan.)

  • Tsangyao CHANG

    (Department of Finance, Feng Chia University, Taichung, Taiwan.)

Abstract

The aim of this paper is to investigate whether or not shocks to visitor arrivals to Taiwan from China, Japan, the USA and Hong Kong, accounting for over 80% of Taiwan’s inbound tourism, are temporary or permanent. The CBL (Carrion-i-Silvestre, Barrio-Castro, and López-Bazo) with the bootstrap approach, which differs from the previous tests considering cross-section dependence and multiple structural breaks based on statistics with good statistical properties, is adopted for the Taiwan’s four inbound time series. The results found that the Severe Acute Respiratory Syndrome (SARS) outbreak had an impact on Taiwan’s four major inbound markets, but with transitory shocks. A global recession occurred in early 2002, but this shock only impacted the tourist arrivals from China and the USA. The deteriorating economy in 2008 and the European debt crisis in 2011 had devastating consequences on the economic growth around the world, which also impacted different source tourist markets in different time periods, but only with temporary shocks.

Suggested Citation

  • Jennifer C. H. MIN & Hsien-Hung KUNG & Tsangyao CHANG, 2019. "Testing the Structural Break of Taiwan Inbound Tourism Markets," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 117-130, June.
    • Handle: RePEc:rjr:romjef:v::y:2019:i:2:p:117-130
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    More about this item

    Keywords

    tourism; time series; tourist source market; intervention shocks; structural break; unit root test;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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