Is the tourism – growth relationship asymmetric in the Cook Islands? Evidence from NARDL cointegration and causality tests

Kumar, Nikeel and Kumar, Ronald R. and Kumar, Radika D. and Stauvermann, Peter J. (2019) Is the tourism – growth relationship asymmetric in the Cook Islands? Evidence from NARDL cointegration and causality tests. Tourism Economics, NA . pp. 1-24. ISSN 1354-8166

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Abstract

We examine whether tourism sector development measured by visitor arrivals per capita has asymmetric growth effects in the Cook Islands using quarterly data from 2010Q1 to 2016Q3. Asymmetric cointegration, long-run elasticities, and dynamic multipliers are estimated using the nonlinear autoregressive distributed lag model developed by Shin et al. Asymmetric causality testing is done using the asymmetric vector autoregression approach with insights from Hatemi-J. We identify structural breaks using the Lee and Strazicich multiple endogenous structural break unit root test. The results indicate that a 1% increase in visitor arrivals would increase gross domestic product (GDP) per capita by 0.92%, whereas a 1% decrease in visitor arrivals would decrease GDP per capita by 0.34%. The identified breaks, 2013Q2 and 2015Q3, are positive and significant in the short run only. The causality result confirms a bidirectional association, thus mutually reinforcing the asymmetric relationship between visitor arrivals and economic growth.

Item Type:	Journal Article
Subjects:	H Social Sciences > HA Statistics H Social Sciences > HB Economic Theory H Social Sciences > HG Finance
Divisions:	Faculty of Business and Economics (FBE) > School of Accounting and Finance
Depositing User:	Ronald Kumar
Date Deposited:	08 Jul 2019 23:29
Last Modified:	08 Jul 2019 23:29
URI:	https://repository.usp.ac.fj/id/eprint/11628

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