International Demand for Medical Tourism in Malaysia: Evidence from Panel Data

  • Norsiah Kadir Faculty of Business and Management, Universiti Teknologi MARA
  • Sabri Nayan School of Economics, Finance and Banking, Universiti Utara Malaysia
Keywords: Macroeconomic variables, medical tourism, Pooled Mean Group, SRI


The present paper attempts to investigate the significance influence of some selected economic variables on the international demand for medical tourism in Malaysia by utilizing Pooled Mean Group (PMG)/Autoregressive Distributed Lag (ARDL) model based on panel data set of ASEAN-4 countries spanning from 2001 to 2017. Findings of the study indicate that the price of medical tourism, travelling cost, real per capita income, exchange rate and health expenditure are statistically significant in influencing international demand for medical tourism in Malaysia for both long run and short run. Moreover, price of tourism in the substitute destination (Indonesia) and inflation are also statistically significant in determining international demand for medical tourism in Malaysia in the short run. The findings are in line with the economic theory. Therefore, to attract more international medical tourists, Malaysia needs to maintain it price competitiveness relative to other substitute destinations in the region, reduce the transport cost as well as improve the quality of medical services provided. Besides, private operators and market participants should influence necessary changes in medical tourism framework to ensure that services are effective and efficient. Ultimately, market players in medical tourism sector should practice Sustainable Responsible Investment (SRI) with aim to stabilize between medical tourism development and social responsibility.


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How to Cite
Norsiah Kadir, & Sabri Nayan. (2021). International Demand for Medical Tourism in Malaysia: Evidence from Panel Data. International Journal of Business and Society, 22(3), 1240-1255.