Analyzing the Influence of Macroeconomic Variables on Tourism Receipts in OIC Countries: A Quantile Analysis Approach Across Varying Income Levels

Saizal Pinjaman, Abdul Rahim Ridzuan, Suddin Lada and Shaidathul Jemin
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Saizal Pinjaman: Centre for Economic Development and Policy, Universiti Malaysia Sabah, Malaysia Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia
Abdul Rahim Ridzuan: Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia Universiti Teknologi Mara, Malaysia
Suddin Lada: Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Malaysia
Shaidathul Jemin: Universiti Teknologi Mara, Malaysia

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 2, 2267-2278

Abstract: This study examines the heterogeneous effects of macroeconomic variables on tourism receipts across income tiers in Organization of Islamic Cooperation (OIC) countries, addressing a critical gap in tourism economics literature. Employing a panel quantile regression approach on data from 34 OIC countries (1995–2020), the research analyzes how exchange rates, income per capita, inflation, and trade openness differentially influence tourism receipts at lower, middle, and upper quantiles of tourism spending. The methodology leverages quantile regression for panel data (QRPD) to account for non-linear relationships and income-level heterogeneity, offering a nuanced alternative to traditional linear models. Key findings reveal significant income-tiered disparities. Exchange rate depreciation enhances tourism receipts in most contexts, except in upper-middle income countries, where volatility signals instability. Income per capita exhibits positive yet inelastic effects in low- and lower-middle-income nations, but adverse impacts in high-income countries, suggesting market saturation. Inflation erodes receipts in low-income economies but stimulates demand in high-income OIC states, reflecting divergent tourist price sensitivities. Trade openness consistently suppresses tourism across quantiles, with high-income countries experiencing the steepest declines. These results challenge the universality of the Tourism-Led Growth Hypothesis, emphasizing context-specific dynamics. Policy recommendations advocate for income-tiered strategies: low-income countries should prioritize exchange rate stabilization, inflation control, and infrastructure investments via Islamic finance instruments, while high-income nations must pivot to premium niches like halal and cultural tourism. Regional cooperation through unified visa policies and OIC wide halal certification standards is critical to harnessing collective tourism potential. Policymakers are urged to balance trade liberalization with targeted tourism-sector incentives to mitigate resource diversion. By aligning interventions with macroeconomic realities, OIC countries can transform tourism into an engine of equitable growth, advancing Sustainable Development Goals (SDGs) on economic diversification and inclusive employment.

Date: 2025
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