Are shocks to tourist arrivals permanent or transitory? A comprehensive analysis on the top 20 most-visited countries

摘要

Tourism sector is highly vulnerable to shocks due to its characteristics. The purpose of this paper is to investigate whether the effects of the shocks on the tourism sector would be permanent or transitory. To this end, I analysed the number of tourist arrivals in the top 20 most-visited countries for the 1995-2018 period. I employed a battery of cross-sectional dependency tests, second-generation panel unit root tests without and with structural breaks. The findings significantly change from non-stationary to stationary when structural breaks are incorporated. The results suggest that tourist arrivals to top 20 most-visited countries are stationary under sharp structural breaks. This finding is important in that shocks hitting tourism sector are transitory and the effects of shocks will eventually die out, but the new equilibrium will not converge to its pre-shock level.