Institutional Quality, Trade, and Tourism Development: A Hierarchical Linear Modelling Approach

Document Type : Research Paper

Authors

1 Assistant Professo, Tourism Economic Department, Institute of Tourism Research, ACECR (Academic Center for Education, Culture and Research), Mashhad, Iran

2 PhD of Economic, Tourism Economic Department, Institute of Tourism Research, ACECR (Academic Center for Education, Culture and Research), Mashhad, Iran

10.30465/jnet.2024.48070.2119

Abstract

This article tries to answer the question of how institutional quality and trade can be effective in tourism development and which institutional factor among the indicators of good governance will have the greatest impact on tourism. For this purpose, the Principal Component Analysis (PCA) method was used to calculate a weighted average for two indices of Institutional Quality and Tourism Development. Then, taking into account the possibility of differences in countries and regions, using Multilevel Regression Modeling (MRM) and estimates in 5 regions of Africa, Arab countries, Asia and the Pacific, Europe, and North America, Latin America and the Caribbean Sea, and in 119 countries were made between 2002 and 2020.
The results of the inter-class correlation coefficient showed that most of the differences are between countries and the region in which the countries are located is not the criterion for the differences in tourism development. Also, the year variable has appeared with 0.048 positive and significant influence on the explanatory variable in the model. The results related to the coefficients of the variables showed that institutional quality, trade index, and per capita income will have a positive and significant effect on the tourism index, and inflation will have a negative effect on the development of tourism. Also, among the individual indicators of good governance, Political Stability, and Regulatory Quality with a positive sign and corruption control with a negative sign appeared significantly in the results.

Keywords

References

شاه آبادی، ابوالفضل؛ و مهری تلیابی، فریبا. (1395). تأثیر نهاد حکمرانی کشور میزبان بر درآمد گردشگری کشورهای درحال توسعه منتخب. برنامه ریزی و توسعه گردشگری, 5(16), 8-30.
فطرس،محمدحسن؛ ایمانی خوشخو، محمدحسین؛ سرلک، احمد، و حسینی صالحی، سید محمد (1400). طالعۀ تطبیقی تأثیر عوامل مؤثر در گردشگری بین‌المللی در کشورهای توسعه‌یافته و درحال توسعۀ منتخب با تأکید بر شاخص نهادی ICRG (شاخص راهنمای بین‌المللی ریسک کشوری)، گردشگری و توسعه، 10(3)، 1-15.
Adedoyin, F. F., Erum, N., & Bekun, F. V. (2022). How does institutional quality moderates the impact of tourism on economic growth? Startling evidence from high earners and tourism-dependent economies. Tourism Economics, 28(5), 1311-1332.
Ağazade, S. (2021). Institutional Quality and Tourism: Panel Causality Analysis in the Case of Mediterranean Countries. Almatourism-Journal of Tourism, Culture and Territorial Development, 12(23), 41-58.
Al-Mulali, U., Fereidouni, H. G., Lee, J. Y., & Mohammed, A. H. (2014). Estimating the tourism-led growth hypothesis: A case study of the Middle East countries. Anatolia, 25(2), 290-298.
Asongu, S., Tchamyou, V., Asongu, N., & Tchamyou, N. (2019). Fighting terrorism in Africa: evidence from bundling and unbundling institutions. Empirical Economics, 56(3), 883-933.
Barometer, U. N. W. T. O. (2022). UNWTO World Tourism Barometer and Statistical Annex.
Bassil, C., Hamadeh, M., & Samara, N. (2015). The tourism led growth hypothesis: the Lebanese case. Tourism Review, 70(1), 43-55.
Chaisumpunsakul, W., & Pholphirul, P. (2018). Does international trade promote international tourism demand? Evidence from Thailand's trading partners. Kasetsart Journal of Social Sciences, 39(3), 393-400.
Chaisumpunsakul, W., & Pholphirul, P. (2018). Does international trade promote international tourism demand? Evidence from Thailand's trading partners. Kasetsart Journal of Social Sciences, 39(3), 393-400.
Chaisumpunsakul, W., & Pholphirul, P. (2018). Does international trade promote international tourism demand? Evidence from Thailand's trading partners. Kasetsart Journal of Social Sciences, 39(3), 393-400.
Chaisumpunsakul, W., & Pholphirul, P. (2018). Does international trade promote international tourism demand? Evidence from Thailand's trading partners. Kasetsart Journal of Social Sciences, 39(3), 393-400.
Cheung, Y. H. Y., & Saha, S. (2015). Exploring the nexus between tourism demand and cultural similarity. Tourism Analysis, 20(2), 229-241.
Chiu, Y. B., Zhang, W., & Ding, K. (2021). Does globalization influence inbound tourism? Evidence from a dynamic panel threshold analysis. Journal of Travel Research, 60(5), 1074-1084.
De Vita, G. (2014). The long-run impact of exchange rate regimes on international tourism flows. Tourism Management, 45, 226-233.
Demidenko, E. (2013). Mixed models: theory and applications with R. John Wiley & Sons.
Demir, E., Gozgor, G., & Paramati, S. R. (2019). Do geopolitical risks matter for inbound tourism?. Eurasian Business Review, 9, 183-191.
Demir, E., Gozgor, G., & Paramati, S. R. (2020). To what extend economic uncertainty effects tourism investments? Evidence from OECD and non-OECD economies. Tourism Management Perspectives, 36, 100758.
Dwyer, L. (2015). Globalization of tourism: Drivers and outcomes. Tourism Recreation Research, 40(3), 326-339.
Esquinas, E. M. B., & Pou, M. Á. C. (2019). Exploring the links between tourism and quality of institutions. Cuadernos de Turismo, (43), 215-247.
Fernandes, E., Pacheco, R. R., & Fernandes, V. A. (2019). Tourism openness, trade openness, and currency‐purchasing power in Brazil: A causality analysis. International Journal of Tourism Research, 21(2), 197-205.
Garg, A. (2013). A study of tourist perception towards travel risk factors in tourist decision making. Asian Journal of Tourism and Hospitality Research, 7(1), 47-57.
Ghaderi, Z., Saboori, B., & Khoshkam, M. (2017). Does security matter in tourism demand?. Current Issues in Tourism, 20(6), 552-565.
Ghalia, T., Fidrmuc, J., Samargandi, N., & Sohag, K. (2019). Institutional quality, political risk and tourism. Tourism Management Perspectives, 32, 100576.
Henderson, C. R. (1953). Estimation of variance and covariance components. Biometrics, 9(2), 226-252.
Hoinaru, R., Buda, D., Borlea, S. N., Văidean, V. L., & Achim, M. V. (2020). The impact of corruption and shadow economy on the economic and sustainable development. Do they “sand the wheels” or “grease the wheels”?. Sustainability, 12(2), 481.
Ibitoye, O. J., & Kleynhans, E. P. (2023). Influence of institutional quality, foreign direct investment and on tourism inflow, South Africa. Acta Commercii, 23(1), 1-12.
Işık, C., Radulescu, M., & Fedajev, A. (2019). The effects of exchange rate depreciations and appreciations on the tourism trade balance: the case of Spain.
Ivanov, S. H., & Webster, C. (2013). Globalisation as a driver of destination competitiveness. Annals of tourism research, 43, 628-633.
Jin, X. C., Qu, M., & Bao, J. (2019). Impact of crisis events on Chinese outbound tourist flow: A framework for post-events growth. Tourism Management, 74, 334-344.
Karabulut, G., Bilgin, M. H., Demir, E., & Doker, A. C. (2020). How pandemics affect tourism: International evidence. Annals of tourism research, 84, 102991.
Khan, M. A., Kong, D., Xiang, J., & Zhang, J. (2020). Impact of institutional quality on financial development: cross-country evidence based on emerging and growth-leading economies. Emerging Markets Finance and Trade, 56(15), 3829-3845.
Khan, M. A., Popp, J., Talib, M. N. A., Lakner, Z., Khan, M. A., & Oláh, J. (2020). Asymmetric impact of institutional quality on tourism inflows among selected Asian Pacific countries. Sustainability, 12(3), 1223.
Kim, Y. R., Saha, S., Vertinsky, I., & Park, C. (2018). The impact of national institutional quality on international tourism inflows: A cross-country evidence. Tourism Analysis, 23(4), 533-551.
Kimura, F., Thangavelu, S. M., Findlay, C., & Chen, L. (2019). Introduction: Services Supply Chain—The Impact on Trade and Development in East Asian Countries. Journal of Southeast Asian Economies (JSEAE), 36(2), 141-152.
Krabokoukis, T., & Polyzos, S. (2021). An investigation of factors determining the tourism attractiveness of Greece’s prefectures. Journal of the Knowledge Economy, 12, 1997-2015.
Kulendran, N., & Wilson, K. (2000). Modelling business travel. Tourism Economics, 6(1), 47-59.
Larsen, S., Brun, W., & Øgaard, T. (2009). What tourists worry about–Construction of a scale measuring tourist worries. Tourism Management, 30(2), 260-265.
Leitão, N. C. (2010). Does trade help to explain tourism demand? The case of Portugal. Theoretical and Applied Economics, 63-74.
Luo, Y., Zhang, L., & Zhang, Y. (2022). Inbound tourism and bilateral trade, evidence from China. Current Issues in Tourism, 25(16), 2595-2614.
McCulloch, C. E., & Searle, S. R. (2004). Generalized, linear, and mixed models. John Wiley & Sons.
Mekinc, J., & Mušič, K. (2020). 8. Child sex tourism–trend or a permanent fact of global tourism?. Tourism & Hospitality, 117-131.
Meo, M., Nathaniel, S., Shaikh, G., & Kumar, A. (2021). Energy consumption, institutional quality and tourist arrival in Pakistan: Is the nexus (a) symmetric amidst structural breaks?. Journal of Public Affairs, 21(2), e2213.
Meșter, I., Simuț, R., Meșter, L., & Bâc, D. (2023). An Investigation of Tourism, Economic Growth, CO2 Emissions, Trade Openness and Energy Intensity Index Nexus: Evidence for the European Union. Energies, 16(11), 4308.
Morgan, W. (2018). Much lost, little gained? Contemporary trade agreements in the Pacific Islands. The Journal of Pacific History, 53(3), 268-286.
Morgan, W. (2018). Much lost, little gained? Contemporary trade agreements in the Pacific Islands. The Journal of Pacific History, 53(3), 268-286.
Mushtaq, R., Thoker, A. A., & Bhat, A. A. (2021). Does institutional quality affect tourism demand? Evidence from India. Journal of Hospitality and Tourism Insights, 4(5), 622-638.
Nguyen, C. P. (2023). Do institutions matter for tourism spending?. Tourism Economics, 29(1), 248-281.
Nonthapot, S. (2016). Mediation between tourism contribution and economic growth in the greater Mekong subregion. Asia Pacific Journal of Tourism Research, 21(2), 157-171.
Ongan, S., & Gocer, I. (2020). The causal relationships between international trade and international tourism in NAFTA countries: Applications of time and frequency domain approaches. The International Trade Journal, 34(3), 319-338.
Pinheiro, J., & Bates, D. (2006). Mixed-effects models in S and S-PLUS. Springer science & business media.
Raudenbush, S. W., & Bryk, A. S. (2002). Hierarchical linear models: Applications and data analysis methods (Vol. 1). sage.Methodology and data
Restrepo, N., Lozano, S., & Clavé, S. A. (2021). Measuring institutional thickness in tourism: An empirical application based on social network analysis. Tourism Management Perspectives, 37, 100770.
Saha, S., Su, J. J., & Campbell, N. (2017). Does political and economic freedom matter for inbound tourism? A cross-national panel data estimation. Journal of Travel research, 56(2), 221-234.
Santana-Gallego, M., Ledesma-Rodríguez, F., & Pérez-Rodríguez, J. V. (2011). Tourism and trade in OECD countries. A dynamic heterogeneous panel data analysis. Empirical Economics, 41, 533-554.
Searle, S., Cassella, G., & McCullouch, C. (1992). Variance Components In: New York: Jonh Wiley-Sons. DOI: http://dx. doi. org/10.1002/9780470316856.
 Searle, S., Cassella, G., & McCullouch, C. (1992). Variance Components In: New York: Jonh Wiley-Sons. DOI: http://dx. doi. org/10.1002/9780470316856.
Song, H., Li, G., & Cao, Z. (2018). Tourism and economic Globalization: An emerging research agenda. Journal of Travel Research, 57(8), 999-1011.
Stepchenkova, S., Su, L., & Shichkova, E. (2019). Marketing to tourists from unfriendly countries: Should we even try?. Journal of Travel Research, 58(2), 266-282.
Su, Y., Li, R., Ma, H., & Huang, L. (2022). Adaptive change of institutions and dynamic governance of the tragedy of the tourism commons: Evidence from rural China. Journal of Hospitality and Tourism Management, 53, 32-49.
Tang, C. F. (2018). The impacts of governance and institutions on inbound tourism demand: evidence from a dynamic panel data study. Asia Pacific Journal of Tourism Research, 23(10), 1000-1007.
Tseng, Y. T., Chen, I. H., Lee, P. H., & Lin, P. C. (2021). Effects of auricular acupressure on depression and anxiety in older adult residents of long-term care institutions: A randomized clinical trial. Geriatric Nursing, 42(1), 205-212.
Turner, L. W., & Witt, S. F. (2001). Factors influencing demand for international tourism: Tourism demand analysis using structural equation modelling, revisited. Tourism economics, 7(1), 21-38.
Umurzakov, U., Tosheva, S., & Salahodjaev, R. (2023). Tourism and sustainable economic development: Evidence from belt and road countries. Journal of the Knowledge Economy, 14(1), 503-516.
Verbeke, G., Molenberghs, G., & Verbeke, G. (1997). Linear mixed models for longitudinal data (pp. 63-153). Springer New York.
Wang, C., Zhang, J., Yu, P., & Hu, H. (2018). The theory of planned behavior as a model for understanding tourists’ responsible environmental behaviors: The moderating role of environmental interpretations. Journal of Cleaner Production, 194, 425-434.
Webster, C., & Ivanov, S. H. (2013). Tourism as a force for political stability. The International Handbook on “Tourism and Peace”(Forthcoming).
White, R. (2007). Immigrant-trade links, transplanted home bias and network effects. Applied Economics, 39(7), 839-852.
Wijesekara, C., Tittagalla, C., Jayathilaka, A., Ilukpotha, U., Jayathilaka, R., & Jayasinghe, P. (2022). Tourism and economic growth: A global study on Granger causality and wavelet coherence. Plos one, 17(9), e0274386.
World Travel and Tourism Council (2021), Travel and Tourism Economic Impact: South Africa Report.
Yue, G., Zubair, A., Usman, M., & Abro, M. A. (2023). Institutional invironment and Tourism: Moderating Role of Host Countries’ Health System. Journal of the Knowledge Economy, 1-17.
Zhang, W., & Chiu, Y. B. (2020). Globalization, Country Risks, and Trade in Tourism Services: Evidence from China. Sustainability, 12(14), 5869.

Files

History

  • Receive Date: 24 January 2024
  • Revise Date: 02 May 2024
  • Accept Date: 18 June 2024

Share

How to cite

Statistics