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

Author

Listed:
  • Nikeel Kumar

    (The University of the South Pacific, Fiji)

  • Ronald Ravinesh Kumar

    (The University of the South Pacific, Fiji; University of Leicester; University of York, UK
    Ton Duc Thang University, Vietnam)

  • Radika Kumar

    (The University of the South Pacific, Fiji; The Commonwealth, UK)

  • Peter Josef Stauvermann

    (Changwon National University, South Korea)

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.

Suggested Citation

  • Nikeel Kumar & Ronald Ravinesh Kumar & Radika Kumar & Peter Josef Stauvermann, 2020. "Is the tourism–growth relationship asymmetric in the Cook Islands? Evidence from NARDL cointegration and causality tests," Tourism Economics, , vol. 26(4), pages 658-681, June.
    • Handle: RePEc:sae:toueco:v:26:y:2020:i:4:p:658-681
    DOI: 10.1177/1354816619859712
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    References listed on IDEAS

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