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Asymmetric Impact of Institutional Quality on Tourism Inflows Among Selected Asian Pacific Countries

Muhammad Asif Khan (), József Popp (), Mirza Nouman Ali Talib (), Zoltán Lakner (), Muhammad Atif Khan () and Judit Oláh ()
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Muhammad Asif Khan: Department of Commerce, Faculty of Management Sciences, University of Kotli, Azad Jammu and Kashmir 11100, Pakistan
József Popp: Faculty of Economics and Social Sciences, Szent István University, 2100 Gödölő, Hungary
Mirza Nouman Ali Talib: School of Economics, Huazhong University of Science and Technology, Wuhan 430074, China
Zoltán Lakner: Department of Food Economics, Faculty of Food Science, Szent István University, Gödöllő, 2100 Budapest, Hungary
Muhammad Atif Khan: Department of Commerce, Faculty of Management Sciences, University of Kotli, Azad Jammu and Kashmir 11100, Pakistan
Judit Oláh: Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary

Sustainability, 2020, vol. 12, issue 3, 1-16

Abstract: From an idealistic viewpoint, the existence of the tourism industry in a country/region is a blessing because of its anticipated sustainable economic benefits. To turn this idealistic state into a realistic one, institutions need to play a pivotal role in optimizing the desired incentives. The present study examines the asymmetric role of institutional quality in stimulating tourism inflows (receipts and arrivals) in selected Asia Pacific countries involved in tourism. The previous literature has established that improving institutional quality attracts tourism inflows to a destination. However, the literature fails to identify the specific point (threshold level) above (below) which the relationship turns positive (negative). To the best of our knowledge, this is the first study that estimates the asymmetries in the nexus of institutions and tourism inflows, using robust nonlinear autoregressive distributed lag approach. Our results show that the tourism inflow in Asian Pacific countries responds asymmetrically to any changes in institutional quality, and there is a single threshold of 7.52 points, where the impact of institutional quality reverses. We conclude that our findings are robust to the alternative measures of tourism inflows. The study offers useful policy inputs for devising short and long-run policies for the betterment of the institutional framework in the region by understanding the asymmetric impact of institutional quality on tourism inflow.

Keywords: institutional quality; tourism inflows; symmetric and asymmetric ARDL (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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