Determinants of Demand for International Tourism in Sri Lanka: An Econometric Evaluation
Jayathilake, P.M.B. (2013). Determinants of demand for international tourism in Sri Lanka: An econometric evaluation, Sri Lankan Journal of Banking and Finance, 1(1): 53-65
13 Pages Posted: 26 May 2014
Date Written: July 5, 2013
International tourism has become a popular global leisure event and emerged as a major source of foreign exchange earnings for the developing countries. This study seeks to investigate the determinants of demand for international tourism in Sri Lanka within the framework of bounds test approach to cointegration. Data were gathered from formal sources of various publications of World Bank and Tourism Development Authority of Sri Lanka. Data analysis was performed using Unit root tests followed by bounds test to cointegration based on Autoregressive Distributed Lag. The results reveal that tourism price in the country, travelling cost, income and exchange rates, tourism prices at alternative destinations are significant determinants of the international tourism demand to the country in the long run. The implication of these results for policy makers is that a more attentions is required to pay for the economic factors associated with the international tourism in order to keep the tourism price in the country at a competitive level.
Keywords: Determinants of international tourism, demand for tourism, cointegration, Sri Lanka
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