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Air Passengers Vertex Curve Theorem - Evidence from ASEAN Countries

Mohd Azlan Abdul Majid, Faridah Pardi, Afizan Amer, Nor Azurah Md Kamdari and Sarah Mardhiah Selamat
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Mohd Azlan Abdul Majid: Faculty of Business Management, Universiti Teknologi MARA (Negeri Sembilan), Malaysia.
Faridah Pardi: Faculty of Business Management, Universiti Teknologi MARA (Negeri Sembilan), Malaysia.
Afizan Amer: Faculty of Business Management, Universiti Teknologi MARA (Negeri Sembilan), Malaysia.
Nor Azurah Md Kamdari: Faculty of Business Management, Universiti Teknologi MARA (Negeri Sembilan), Malaysia.
Sarah Mardhiah Selamat: Faculty of Business Management, Universiti Teknologi MARA (Negeri Sembilan), Malaysia.

Asian Economic and Financial Review, 2019, vol. 9, issue 3, 329-338

Abstract: This study examines new generic hypotheses and theorems of the aviation industry?s model for air passengers for ASEAN countries. A static panel data model consists of a simple panel unit and root and cointegration tests were established for the period from 1997 to 2016. Initially, we hypothesized that internet connection, income level, tax and tourism expenditures all have significant impacts on the volume of air passengers in ASEAN countries. Our main findings showed that gross national income (GNI) has a positive significant impact on air passengers? volume and it is also the peak of the vertex. In addition, according to the hypothesized vertex theorem, the policy-impact of taxation on air passenger volume showed a weak significance, while the digital-impact hypothesis of broadband and mobile technology exhibited a mediocre and substitution impact. Our conclusion from the findings highlighted that fundamentals of domestic economic growth should be strengthened in order to increase internal economic capacity. By achieving this, the volume of the air passenger could be doubled and therefore would bring back a growth of income and prosperity to the nation, particularly in the ASEAN market.

Keywords: Air passenger; ASEAN aviation; VERTEX curve; Static panel; Policy impact hypotheses; Digital impact hypotheses; Macroeconomics impact hypotheses. (search for similar items in EconPapers)
JEL-codes: F62 F68 L93 L96 O00 (search for similar items in EconPapers)
Date: 2019
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