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On the (a)Symmetric Link Between Exchange Rate Variability and Tourism Inflows: Recent Evidence from the ASEAN-5 Countries


We shed new light on the long- and short-run asymmetric impact of exchange rate on tourism inflows over the period of 1995 to 2019 for selected ASEAN countries (Indonesia, Malaysia, Philippines, Singapore and Thailand; ASEAN-5). The investigation utilized Shin et al. (2014) recently developed NARDL model and the Toda and Yamamoto (1995) causality test. The asymmetric effect was introduced via decomposing the real exchange rate into positive and negative innovations. The key findings show long-run relationship (cointegration) for all countries, except the Philippines. Additionally, findings support asymmetric long-run effect of exchange rate for Indonesia, Malaysia and Thailand, but short-run asymmetric effect was only verified for Malaysia. Finally, the Toda and Yamamoto causality test revealed diverse findings regarding the exchange rate- tourism inflows nexus.

Keywords: tourism, exchange rate, ASEAN, cointegration, NARDL