The Causal Relationships between International Trade and International Tourism in NAFTA countries: Applications of Time and Frequency Domain Approaches

ABSTRACT

This study aims to investigate the causal and long-run relationships between international trade and international tourism among the NAFTA countries for the USA-Canada and USA-Mexico pairs, bilaterally. To this aim, the causality in the time and frequency domain approaches was applied over the period of 1997:M12 to 2017:M02. For the cointegration relations and cointegration coefficients, the bounds testing approach and autoregressive distributed lag (ARDL) method were applied, respectively. The overall empirical results indicate that international trade may promote international tourism and vice versa since these two global economic phenomena interact with each other over time.

KEYWORDS:

• ARDL
• frequency domain causality
• NAFTA
• time domain causality

Disclosure statement

No potential conflict of interest was reported by the authors.