RELATIONSHIP BETWEEN INBOUND TOURISM AND ECONOMIC DEVELOPMENT IN EXPORT-ORIENTED COUNTRIES: THE CASE OF TAIWAN

摘要

This paper is trying to investigate the relationship between inbound tourism and economic development in the export-oriented country, Taiwan. For that, the inbound tourism receipt and GDP of Taiwan were taken to represent Taiwanese inbound tourism growth and economic development, respectively, and the Engle and Granger two-stage method is used to test whether cointegration exists or not between the proxy variables, which strongly shows that there exists a long-run equilibrium relationship. Further, a two-way causal relationship hypothesis is verified by causality test and it is found that inbound tourism and economic development in Taiwan accurately cause each other.