Examining the relationship between tourism, trade, and income: evidence from Vietnam

Abstract

Vietnam's tourism industry has been one of the economy's key growth drivers for years. This study examines the relationship between international tourist arrivals, bilateral trade, and income in Vietnam by applying a cointegration model with the panel data of Vietnam and its major global tourism markets. The results show that export and per capita income significantly influence Vietnam's international tourist arrivals from 2008 to 2019. The study also uses causality techniques to test for the direction of causality and found a two-way causal effect from exports and income to international tourist arrivals. These findings suggest that future economic policy should focus more on tourism and trade-related to sustain the growth of the tourism industry and generate more foreign exchange earnings for Vietnam.