Event Tourism Demand and Selected Macroeconomic Variables: An Econometrics View of the Long-Run and Short-Run Relationships
Abstract
Assessing the substantial economic benefits of event tourism will provide insight into the effectiveness of tourism event in Malaysia.The significance of the tourism event sector has the potential to boost Malaysia’s economic growth, increase the arrivalof international tourists, increase tourist expenditure and further job creations.This study empirically investigates determinantsof event tourism demand in Malaysia during the period of 1991Q1to 2016Q4. The Autoregressive Distributed Lag (ARDL) techniqueis used to find the long-run cointegration relationshipsof the model. The model is further tested by employing diagnostic tests(Normality test, Serial Autocorrelation, Heteroscedasticity and Ramsey’s RESET test) and stability tests(CUSUM and CUSUMSQ). The empirical analysis of the boundstest indicatesthat there is a long-run cointegration among the variables under study. Besides that, the ARDL model produces reliable results,as all of the computed coefficientsof the independent variables are statistically significant with the expected signs. The findings are consistent witheconomic theory and the model passed all of the diagnostic tests.The findings of this study imply that event demand can be improved significantly when government spending,theexchange rate and tourist receipts increaseand the crude oil price decreases. Hence, government authorities and the private sector should createan integrated plan to enhancethe profit gained through the Malaysian economyfrom event tourism.
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