PERTANIKA JOURNAL OF SCIENCE AND TECHNOLOGY

The nonlinear interaction of oil prices, inflation, the exchange rate, institutional quality, and trade balance on tourist arrivals in Bangladesh is scrutinized in this study. The technique utilized in this study, Nonlinear Autoregressive Distributed Lag (NARDL), is a novel co-integrating strategy. The yearly time series data used in this study spanned 1995 to 2019. The NARDL bound test is performed to assess if variables like oil prices, inflation, the exchange rate, institutional quality, and trade balance on tourist arrivals are co-integrated. Oil prices and exchange rates, according to the findings, have a long-run negative and significant impact on tourism demand, whereas improvements in institutional quality are positively associated with tourist arrivals. Moreover, the study’s findings revealed a nonlinear kinship between the trade balance, inflation, and tourism demand across time. The asymmetric results obtained could enable Bangladeshi policymakers to make more precise decisions.

• Abdlaziz, R. A., Rahim, K. A., & Adamu, P. (2016). Oil and food prices co-integration nexus for Indonesia: A non-linear autoregressive distributed lag analysis. International Journal of Energy Economics and Policy, 6(1), 82-87.

• Achyar, D. H., & Hakim, D. B. (2021). Cointegration analysis of tourism sector, inflation, interest rate and economic growth in a special autonomy region of Aceh Province, Indonesia. International Journal of Scientific Research in Science, Engineering and Technology, 8(1), 216-221. https://doi.org/10.32628/IJSRSET218144

• Agiomirgianakis, G., Serenis, D., & Tsounis, N. (2015). Effects of exchange rate volatility on tourist flows into Iceland. Procedia Economics and Finance, 24, 25-34. https://doi.org/10.1504/IJTP.2015.075128

• Al-Mulali, U., Gholipour, H. F., & Al-hajj, E. (2020). The nonlinear effects of oil prices on tourism arrivals in Malaysia. Current Issues in Tourism, 23(8), 942-946. https://doi.org/10.1080/13683500.2019.1586844

• Anorou, E., & Elike, U. (2009). An empirical investigation into the impact of high oil prices on economic growth of oil-importing African countries. International Journal of Economic Perspectives, 3(2), 121-129.

• Anoruo, E. (2011). Testing for linear and nonlinear causality between crude oil price changes and stock market returns. International Journal of Economic Sciences and Applied Research, 4(3), 75-92.

• Bahmani-Oskooee, M., & Bohl, M. T. (2000). German monetary unification and the stability of the German M3 money demand function. Economics Letters, 66(2), 203-208. https://doi.org/10.1016/S0165-1765(99)00223-2

• Balcilar, M., Van Eyden, R., Inglesi-Lotz, R., & Gupta, R. (2014). Time-varying linkages between tourism receipts and economic growth in South Africa. Applied Economics, 46(36), 4381-4398. https://doi.org/10.1080/00036846.2014.957445

• Becken, S. (2008). Developing indicators for managing tourism in the face of peak oil. Tourism Management, 29(4), 695-705. https://doi.org/10.1016/j.tourman.2007.07.012

• Becken, S., & Lennox, J. (2012). Implications of a long-term increase in oil prices for tourism. Tourism Management, 33(1), 133-142. https://doi.org/10.1016/j.tourman.2011.02.012

• Brown, R. L., Durbin, J., & Evans, J. M. (1975). Techniques for testing the constancy of regression relationships over time. Journal of the Royal Statistical Society: Series B (Methodological), 37(2), 149-163. https://doi.org/10.1111/j.2517-6161.1975.tb01532.x

• Cheng, K. M. (2012). Tourism demand in Hong Kong: Income, prices, and visa restrictions. Current Issues in Tourism, 15(3), 167-181. https://doi.org/10.1080/13683500.2011.569011

• Dincer, M. Z., Dincer, F. I., & Ustaoglu, M. (2015). Reel effective exchange rate volatilities impact on tourism sector in Turkey: An empirical analysis of 2003-2014. Procedia Economics and Finance, 23, 1000-1008. https://doi.org/10.1016/S2212-5671(15)00352-4

• Farmaki, A., Altinay, L., Botterill, D., & Hilke, S. (2015). Politics and sustainable tourism: The case of Cyprus. Tourism Management, 47, 178-190. https://doi.org/10.1016/j.tourman.2014.09.019

• Ghalia, T., Fidrmuc, J., Samargandi, N., & Sohag, K. (2019). Institutional quality, political risk and tourism. Tourism Management Perspectives, 32, Article 100576. https://doi.org/10.1016/j.tmp.2019.100576

• Gokmenoglu, K. K., Bekun, F. V., & Taspinar, N. (2016). Impact of oil dependency on agricultural development in Nigeria. International Journal of Economic Perspectives, 10(2), 151-163.

• Görmüş, Ş., & Göçer, İ. (2010). The socio-economic determinant of tourism demand in Turkey: A panel data approach. International Research Journal of Finance and Economics, 55(1), 88-99.

• Habibi, F. (2017). The determinants of inbound tourism to Malaysia: A panel data analysis. Current Issues in Tourism, 20(9), 909-930. https://doi.org/10.1080/13683500.2016.1145630

• Hamilton, J. M., & Tol, R. S. (2007). The impact of climate change on tourism in Germany, the UK and Ireland: A simulation study. Regional Environmental Change, 7(3), 161-172. https://doi.org/10.1007/s10113-007-0036-2

• Hanafiah, M. H. M., & Harun, M. F. M. (2010). Tourism demand in Malaysia: A cross-sectional pool time-series analysis. International Journal of Trade, Economics and Finance, 1(1), 80-83.

• Haseeb, M., & Azam, M. (2021). Dynamic nexus among tourism, corruption, democracy and environmental degradation: A panel data investigation. Environment, Development and Sustainability, 23(4), 5557-5575. https://doi.org/10.1007/s10668-020-00832-9

• Ibrahim, M. H. (2015). Oil and food prices in Malaysia: A nonlinear ARDL analysis. Agricultural and Food Economics, 3(1), 1-14. https://doi.org/10.1186/s40100-014-0020-3.

• Islam, M. S. (2015). Study on factors influencing tourism: Way forward for sustainable tourism in Bangladesh. Journal of Tourism, Hospitality and Sports, 6, 1-13.

• Jalil, A., Mahmood, T., & Idrees, M. (2013). Tourism-growth nexus in Pakistan: Evidence from ARDL bounds tests. Economic Modelling, 35, 185-191. https://doi.org/10.1016/j.econmod.2013.06.034

• Katrakilidis, C., & Trachanas, E. (2012). What drives housing price dynamics in Greece: New evidence from asymmetric ARDL cointegration. Economic Modelling, 29(4), 1064-1069. https://doi.org/10.1016/j.econmod.2012.03.029

• Khan, M. A., Popp, J., Talib, M. N. A., Lakner, Z., Khan, M. A., & Oláh, J. (2020). Asymmetric impact of institutional quality on tourism inflows among selected Asian Pacific countries. Sustainability, 12(3), Article 1223. https://doi.org/10.3390/su12031223

• Kim, Y. R., Saha, S., Vertinsky, I., & Park, C. (2018). The impact of national institutional quality on international tourism inflows: A cross-country evidence. Tourism Analysis, 23(4), 533-551. https://doi.org/10.3727/108354218X15391984820503

• Kisswani, K. M., & Harraf, A. (2021). Asymmetric impact of oil price shocks on tourism: Evidence from selected MENA countries. In M. S. B. Ali (Ed.), Economic Development in the MENA Region: New Perspectives (pp. 45-63). Springer. https://doi.org/10.1007/978-3-030-66380-3_4

• Kisswani, K. M., Zaitouni, M., & Moufakkir, O. (2020). An examination of the asymmetric effect of oil prices on tourism receipts. Current Issues in Tourism, 23(4), 500-522. https://doi.org/10.1080/13683500.2019.1629578

• Lacheheb, M., & Sirag, A. (2019). Oil price and inflation in Algeria: A nonlinear ARDL approach. The Quarterly Review of Economics and Finance, 73(C), 217-222. https://doi.org/10.1016/j.qref.2018.12.003.

• Lee, H. S., Lee, S. Y., & Har, W. M. (2020). Roles of institutional quality on the relationship between tourism and economic development in Malaysia. Journal of Environmental Treatment Techniques, 8(1), 119-124.

• Liang, C. C., Troy, C., & Rouyer, E. (2020). US uncertainty and Asian stock prices: Evidence from the asymmetric NARDL model. The North American Journal of Economics and Finance, 51, Article 101046. https://doi.org/10.1016/j.najef.2019.101046

• Liu, A., & Pratt, S. (2017). Tourism’s vulnerability and resilience to terrorism. Tourism Management, 60, 404-417. https://doi.org/10.1016/j.tourman.2017.01.001

• Meo, M. S., Chowdhury, M. A. F., Shaikh, G. M., Ali, M., & Sheikh, S. M. (2018). Asymmetric impact of oil prices, exchange rate, and inflation on tourism demand in Pakistan: New evidence from nonlinear ARDL. Asia Pacific Journal of Tourism Research, 23(4), 408-422. https://doi.org/10.1080/10941665.2018.1445652

• Mondal, M., & Haque, S. (2017). SWOT analysis and strategies to develop sustainable tourism in Bangladesh. UTMS Journal of Economics, 8(2), 159-167.

• Mushtaq, R., Thoker, A. A., & Bhat, A. A. (2020). Does institutional quality affect tourism demand? Evidence from India. Journal of Hospitality and Tourism Insights, 4(5), 622-638. https://doi.org/10.1108/JHTI-05-2020-0088

• Naidu, S., Chand, A., & Pandaram, A. (2017). Exploring the nexus between urbanisation, inflation and tourism output: Empirical evidences from the Fiji Islands. Asia Pacific Journal of Tourism Research, 22(10), 1021-1037. https://doi.org/10.1080/10941665.2017.1360923

• Pektas, S. Y., & Unluonen, K. (2020). The evaluation of tourism in Turkey in terms of inflation. Journal of Tourismology, 6(1), 111-132. https://doi.org/10.26650/jot.2020.6.1.0012

• Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289-326. https://doi.org/10.1002/jae.616.

• Raza, N., Shahzad, S. J. H., Tiwari, A. K., & Shahbaz, M. (2016). Asymmetric impact of gold, oil prices and their volatilities on stock prices of emerging markets. Resources Policy, 49, 290-301. https://doi.org/10.1016/j.resourpol.2016.06.011

• Romilly, P., Song, H., & Liu, X. (2001). Car ownership and use in Britain: A comparison of the empirical results of alternative cointegration estimation methods and forecasts. Applied Economics, 33(14), 1803-1818. https://doi.org/10.1080/00036840011021708

• Sek, S. K. (2017). Impact of oil price changes on domestic price inflation at disaggregated levels: Evidence from linear and nonlinear ARDL modeling. Energy, 130, 204-217. https://doi.org/10.1016/j.energy.2017.03.152

• Shaari, M. S., Ahmad, T. S. T., & Razali, R. (2018). Tourism led-inflation: A case of Malaysia. In MATEC Web of Conferences (Vol. 150, p. 06026). EDP Sciences. https://doi.org/10.1051/matecconf/201815006026

• Shaeri, K., Adaoglu, C., & Katircioglu, S. T. (2016). Oil price risk exposure: A comparison of financial and non-financial subsectors. Energy, 109, 712-723.https://doi.org/10.1016/j.energy.2016.05.028

• Sharma, C., & Pal, D. (2020). Exchange rate volatility and tourism demand in India: Unraveling the asymmetric relationship. Journal of Travel Research, 59(7), 1282-1297. https://doi.org/10.1177/0047287519878516

• Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. In R. C. Sickles & W. C. Horrace (Eds.), Festschrift in Honor of Peter Schmidt (pp. 281-314). Springer. https://doi.org/10.1007/978-1-4899-8008-3_9

• Tang, C. F., & Abosedra, S. (2014). The impacts of tourism, energy consumption and political instability on economic growth in the MENA countries. Energy Policy, 68, 458-464. https://doi.org/10.1016/j.enpol.2014.01.004

• Tang, J., Sriboonchitta, S., Ramos, V., & Wong, W. K. (2016). Modelling dependence between tourism demand and exchange rate using the copula-based GARCH model. Current Issues in Tourism, 19(9), 876-894. https://doi.org/10.1080/13683500.2014.932336

• Toh, R. S., Khan, H., & Goh, L. (2006). Japanese demand for tourism in Singapore: A cointegration approach. Tourism Analysis, 10(4), 369-375. https://doi.org/10.3727/108354206776162831

• Usman, O., Elsalih, O., & Koshadh, O. (2020). Environmental performance and tourism development in EU-28 Countries: The role of institutional quality. Current Issues in Tourism, 23(17), 2103-2108. https://doi.org/10.1080/13683500.2019.1635092

• Vita, G. D., & Kyaw, K. S. (2013). Role of the exchange rate in tourism demand. Annals of Tourism Research, 43, 624-627. 10.1016/j.annals.2013.07.011

• Webber, A. G. (2001). Exchange rate volatility and cointegration in tourism demand. Journal of Travel Research, 39(4), 398-405. https://doi.org/10.1177/004728750103900406

• Yap, G. (2012). An examination of the effects of exchange rates on Australia’s inbound tourism growth: A multivariate conditional volatility approach. International Journal of Business Studies: A Publication of the Faculty of Business Administration, Edith Cowan University, 20(1), 111-132.

• Yeoman, I., Brass, D., & McMahon-Beattie, U. (2007). Current issue in tourism: The authentic tourist. Tourism Management, 28(4), 1128-1138. https://doi.org/10.1016/j.tourman.2006.09.012