The Determinants of Tourism Demand by Mainland China in Taiwan
Keywords:Tourism demand, Cointegration analysis, Error correction model
AbstractMainland China is the most important source of tourism for Taiwan in recent years. The purpose of this paper is to investigate the changes in the long-run demand for tourism in Taiwan by Mainland China. Monthly data from these two countries for the period between January 2001 and June 2014 are employed. Johansen maximum likelihood procedure is used in the cointegration analysis and error correction model to test the Mainland China tourism demand for Taiwan. The result indicates that the income in the origin country (that is, Mainland China), transportation costs in Taiwan, cross-strait trade and exchanges rates between these two countries are key determinants of tourism demand by Mainland China.
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