Impact of sensitivity index on tourism-economic growth relationships

Veli Yilanci, Maxwell Kongkuah and Seyi Akadiri ()

International Journal of Services, Economics and Management, 2023, vol. 14, issue 3, 345-361

Abstract: This study examines the relationship among risk - uncertainties, economic growth and tourism in South Korea over the period 1990Q1-2019Q4. To achieve study stated objective, we derive a new index called the sensitivity index. It is a dimensionless signal used in statistic detection theory that reflects the impact of uncertainties and risks using principal component analysis. We employ the Fourier Toda-Yamamoto predictive test and find one-way causality running from the sensitivity index to tourism. Empirical results show a negative and significant predictive effect of the sensitivity index on tourism and economic growth. Summarily, sensitivity index negatively impacts on tourism development and hence overall economic growth. Thus, governments and policymakers in tourist destinations of the world should focus and pay close attention on enhancing tourist safety, by increasing ties with neighbouring economies, and enforce intelligence on tourists' gathering in any tourist centres among other relevant policy suggestions.

Keywords: tourism; economic growth; sensitivity; index; risk; uncertainties; predictive methods. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:injsem:v:14:y:2023:i:3:p:345-361

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