The Relationship between Macroeconomic Factors and Tourism Demand for OIC Countries

Abstract

Objective – The current paper investigates the relationship between macroeconomic factors and tourism demand for OIC countries. Methodology – The current paper employed the panel quantile regression analysis to assess the relationship. Findings – It is demonstrated that the impact of macroeconomic factors on tourism receipts is heterogeneous depending on the levels of tourism spending in the OIC host countries. The exchange rate and income exhibit a positive relationship with tourism demand. Meanwhile, inflation presents a negative relationship towards tourism demand at the lower level of tourism demand yet is positively related to the higher level. On the other hand, trade openness is negatively related to tourism receipts in general, and the strength of the relationship decreases at a higher level of demand. Novelty – Compared to previous studies, the impact of the macroeconomic factors was assessed across different levels of tourism demand. Type of Paper: Empirical JEL Classification: L83, Z32, O10 Keywords: Tourism Demand; Macroeconomic Factors; OIC countries; Quantile Regression Reference to this paper should be made as follows: Pinjaman, S; Jemin, S; Ridzuan, A.R; Lada, S. (2023). The Relationship Between Macroeconomic Factors and Tourism Demand for OIC Countries, J. Bus. Econ. Review, 8(2), 60–68. https://doi.org/10.35609/jber.2023.8.2(2)