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MEASURING THE RELATIONSHIP BETWEEN INTERNATIONAL TRADE AND INTERNATIONAL TOURIST DEMAND (CASE STUDY OF INDONESIA)
Abstract
This paper tries to investigate whether there is a relationship between international trade and international tourist arrivals in Indonesia using panel data. For measuring the consistency of the variables, the authors used three models such as Pooled Least Squared (PLS), Fixed Effect, and Random Effect. Using 34 countries of origin from 2006-2016. As the control variables, tourist arrivals in the previous year, GDP, population of origin country, visa-free policy, price ratio, and distance were used in helping to build the model. The results showed that there is a positive correlation between International trade and international tourist arrivals. Tourist arrivals in the previous year, GDP of origin country, population of origin country, and visa-free policy have a positive correlation for international tourist arrivals. While distance, and price ratio have a negative significant correlation. These results can be supportive of government strategies that aim to enhance the country’s trade value as well as stimulate Indonesia’s international tourism demand.
Keywords: International Tourism Demand, International Trade, Panel Data, Indonesia
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DOI: https://doi.org/10.20961/jaedc.v5i1.42427
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