| This paper tries to investigate long and short-run relationships between international tourist arrivals from Japan, Japan GDP, living cost, and substitute prices. For relationship and impact, the cointegration test and vector error correction model are used, respectively. Three cointegration vectors are obtained by the Johansen method based on VAR, which means the long-run relationship between the four model variables exists. In addition, the short-run equilibrium adjustment processes are discussed by generalized impulse response analysis. Basically, the short-run results confirm theoretical findings such that the tourist arrival has positive relationship with GDP and negative one with the cost of living. |
Updated 07/09/2013