Does tourism effectively stimulate Malaysia's economic growth?

Abstract

This study attempts to further verify the validity of the tourism-led growth hypothesis in Malaysia using a multivariate model derived from the Solow growth theory. It employs annual data from 1975 to 2011. We find that economic growth, tourism and other determinants are cointegrated. Specifically, tourism has a positive impact on Malaysia's economic growth both in the short-run and in the long-run. The Granger causality test indicates that tourism Granger-causes economic growth. All this provides the empirical support for the tourism-led growth hypothesis in Malaysia. In light of this, any policy initiative that promotes tourism could contribute to Malaysia's economic growth. © 2014 Elsevier Ltd. All rights reserved.

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@inproceedings{Tang2015DoesTE, title={Does tourism effectively stimulate Malaysia's economic growth?}, author={Chor Foon Tang and E. C. Tan}, year={2015} }