The Impact of International Travel on International Trade – the case of ASEAN
Absztrakt
This paper uses a gravity model with export flows as the explanatory variable, country’s GDP, country’s population and distance between two countries as control variables, international arrivals as the variable of interest, and adds other explanatory variables such as the Global Peace Index and World Happiness Index, and dummy variables of Visa-free, Visa-on-arrival and common Free Trade Area, to the analysis. The author conducts a panel data analysis on bilateral exports between ASEAN countries and five trading partner countries for the period 2012-2020. The empirical results show that the coefficient on international arrivals as the variable of interest is statistically positive and significant. This implies that booming international travel positively contributes to the size of international trade between ASEAN and the five countries. Coefficients on GDP and geographical distance as control variables are both significant in the expected direction. In addition, other explanatory variables related to international travel, such as visa-free, visa-on-arrival, common free trade area and global peace index, are all statistically significant under certain conditions. Thus, promoting the recovery and development of international travel can be an effective starting point for international trade growth between ASEAN and its trading partner countries today and in the years to come. Moreover, the findings of this paper can provide a direction and recommendations for ASEAN countries to follow in the process of promoting travel integration.