Exploring the Nexus between Trade, Visitor Arrivals, Remittances and Income in the Pacific: a Study of Vanuatu

Ronald Kumar, Ronald Vijay Naidu () and Radika Kumar ()
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Ronald Vijay Naidu: University of the South Pacific, Suva, Fiji
Radika Kumar: Ministry of Foreign Affairs & International Cooperation, Suva, Fiji

Acta Universitatis Danubius. OEconomica, 2011, issue 4(4), 199-218

Abstract: We explore the contributions of trade openness, remittance inflows and expansion in tourism towards improving income in Vanuatu over the periods 1983-2009 using the augmented Solow approach and the ARDL bounds test. The results show trade openness and remittances have a positive and statistically significant effect on the long run growth of the economy while tourism expansion is not statistically significant. For a broad-based development policy we propose: remittance inflows need to be encouraged and additional remittance markets to be explored; trade negotiations with specific focus on temporary movement of natural persons need to be prioritized; and ensuring access to financial services and technology to rural and outer islands in Vanuatu. To confine to diversity of the economy, there is a further need to develop tourism infrastructure besides putting policies in place to ensure that tourism sector operations benefit trickle down to the grassroots level of the society.

Keywords: economic growth; tourism expansion; ARDL Bounds Test; Vanuatu (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (9)

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