Sage Journals: Discover world-class research

Abstract

Since the 1990s, the vogue of globalization and liberalization worldwide has fostered more international transactions. This paper assesses whether there is a causal link between transnational goods and people flows. Using a dynamic econometric model for the causal analysis of panel data, the study examines bilateral tourism and trade flows between Korea and its 21 trading partners worldwide over a 12-year period. The empirical results illustrate that policies aimed at boosting international human interchange may lead to an increased goods trade. The paper introduces a ‘multilevel causality analysis’ and ‘multiple causal path analysis’ to elucidate the structure and mechanism of the causal relationship between tourism and trade flows.

Keywords

tourism and trade flows Granger causality test panel data analysis panel unit root test multilevel causality analysis multiple causal path analysis

Get full access to this article

View all access options for this article.

References

Aradhyula

Tronstad

(2003), ‘Does tourism promote cross-border trade?’, American Journal of Agricultural Economics, Vol 85, No 3, pp 569–579.

Dickey

D.A.

Fuller

W.A.

(1979), ‘Distribution of the estimators for autoregressive time series with a unit root’, Journal of the American Statistical Association, Vol 74, pp 427–431.

Eilat

Einav

(2004), ‘Determinants of international tourism: A three-dimensional panel data analysis’, Applied Economics, Vol 36, pp 1315–1327.

Granger

C.W.J.

(1969), ‘Investigating causal relations by econometric models and cross-spectral methods’, Econometrica, July, pp 424–438.

Gray

H.P.

(1970), International Travel – International Trade, Heath Lexington Books, Lexington, MA.

Gujarati

D.N.

(2003), Basic Econometrics, 4th edition, McGraw Hill, New York.

K.S.

Persan

M.H.

Shin

(2003), ‘Testing for unit roots in heterogeneous panels’, Journal of Econometrics, Vol 115, pp 53–74.

Koop

(2000), Analysis of Economic Data, John Wiley and Sons, Chichester.

Kulendran

Wilson

(2000), ‘Is there a relationship between international trade and international travel?’, Applied Economics, Vol 32, pp 1001–1009.

10.

Shan

Wilson

(2001). ‘Causality between trade and tourism: Empirical evidence from China’, Applied Economics Letters, Vol 8, pp 279–283.

11.

SICE (2007), Foreign Trade Information System (http://www/sice.oas.org/trade.asp, accessed May 2007).

12.

UNWTO (2007), WTO World Tourism Barometer, World Tourism Organization, Madrid.

13.

WTO (2006), International Trade Statistics, World Trade Organization, Geneva.

14.

WTTC (2005), Progress and Priorities 2005/2006, World Travel and Tourism Council, London (http://www.wttc.org/bin/pdf/original_pdf_file/progresspriorities05-06.pdf).