Mixed frequency evidence of the tourism growth relationship in small Island developing states: a case study of Tonga. Issue 3 (4th March 2021)

• Record Type: Journal Article
• Authors: Kumar, Nikeel Nishkar; Chandra, Ravinay Amit; Patel, Arvind
• Is Part Of: Asia Pacific journal of tourism research. Volume 26:Issue 3(2021)
• Page Start: 294
• Page End: 307
• Publication Date: 2021-03-04
• Subjects: Tourism led growth hypothesis -- tourism development -- seasonality and quarterly data -- mixed data sampling -- mixed frequency cointegration and causality -- airline and cruise-ship arrivals -- structural breaks -- small island developing states -- Asia Pacific region -- Tonga; Tourism -- Asia -- Periodicals; Tourism -- Pacific Area -- Periodicals; 338.4791504429
• DOI: 10.1080/10941665.2020.1862884
• Languages: English
• ISSNs: 1094-1665

Abstract

ABSTRACT: In this study, we examine the effect of tourism on economic growth in Tonga. We apply Ghysels Beta-MIDAS approach to estimate the elasticity of tourism, identify breaks with the multiple break test, and test for causality using the mixed frequency VAR approach. We utilize a sample from 1995 quarter 1 to 2018 quarter 4. The results indicate that the long-run effect of tourism is 0.06. Two structural breaks are identified, and both have negative growth effects. Unidirectional causality from tourism to real per-capita GDP is noted. The findings indicate that Tonga's economic growth can be improved by promoting tourism.