Hong Kong's aviation and tourism growth - An empirical investigation

Wai Hong Kan Tsui, Xiaowen Fu, Chuanzhong Yin and Huaxin Zhang

Journal of Air Transport Management, 2021, vol. 93, issue C

Abstract: This study investigates the critical link between aviation and tourism growth in Hong Kong, with a focus on the identification of causal relationships between scheduled airline seat capacity and visitor arrivals. This is achieved through the cointegration analysis and Granger-causality test, using monthly data collected from Hong Kong's top 17 tourist source markets during 2008–2018. Our analysis finds clear evidence of an overall two-way causal relationship between airline scheduled capacity and tourist arrivals. The positive externalities between the two crucial sectors to the Hong Kong economy call for coordinated planning and policy design in the tourism and aviation sectors, and justify continued government support. On the other hand, market-specific features are evident in selected markets. Such heterogeneity is likely due to airline network effect and regulation in the international market. Therefore, direct subsidy is not always an efficient support measure. A combination of liberalization policy and industry supports are preferred in views of the benefits to be achieved for the two sectors and the Hong Kong economy.

Keywords: Air transport; Tourism; Causality; Aviation and tourism; Tourist arrivals; Tourist source markets; Hong Kong (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:93:y:2021:i:c:s0969699721000193

DOI: 10.1016/j.jairtraman.2021.102036

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