Do Oil Price Volatility and Exchange Rates Affect International Tourist Arrivals Asymmetrically? A Case Study of Sabah

Lily Jaratin — Tue, 17 Dec 2024 00:00:00 +0100

This study examines the asymmetric effect of exchange rates and oil price volatility on international tourist arrivals in Sabah, Malaysia, using a nonlinear Autoregressive Distributed Lag (NARDL) model. The study findings showed there is long-run cointegration amongst the studied variables. In addition, the results also showed a significant and inverse long-run relationship between exchange rates, oil price volatility, and international tourist arrivals for both positive and negative series of exchange rates and oil price volatility. However, only the volatility of oil prices has an asymmetric influence on international tourist arrivals, where a decrease in oil price volatility has a more significant effect than an increase, indicating that positive information, such as a decline in oil price volatility, has a greater influence on tourist arrivals in Sabah. Thus, these findings highlight the importance of incorporating economic considerations with asymmetric effects into models of tourist arrivals. Practically, the findings provide significant insights for tourism stakeholders, allowing for more informed decision-making and strategic planning. Acknowledging potential limitations, such as the study's narrow focus on Sabah and excluding other potential factors is essential. Future research can expand the analysis to include additional variables and investigate additional destinations to provide a complete understanding.

Academic Journal of Business and Social Sciences

Do Oil Price Volatility and Exchange Rates Affect International Tourist Arrivals Asymmetrically? A Case Study of Sabah