Revisiting the Taiwan tourism and economic growth nexus: The role of the impact of COVID-19 using Quantile on Quantile approach

ABSTRACT

In this paper, we analyse the tourism-led growth hypothesis in Taiwan’s economy. To this end, we consider three tourism markets––China, Japan and the US––and apply quantile-on-quantile regression. Our results indicate that (i) high quantiles of the Chinese tourist market have the most growth effects, while moderate quantiles of Japan and the US markets accelerate economic growth in Taiwan; (ii) recessions in these three markets during the COVID-19 pandemic negatively affected the economic growth of Taiwan and (iii) development of these three tourism markets acts as an engine of economic growth during downturn periods.

KEYWORDS:

• Tourism
• economic growth
• quantile-on quantile regression
• COVID-19

JEL CLASSIFICATION:

• C22
• C50
• O11

Acknowledgments

This research was funded by a research grant from the Ministry of Science and Technology in Taiwan (MOST 110-2410-H-130-048-).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Due to Taiwan’s government policy, which opened to Chinese tourists in 2008, and industrial cooperation between the two countries, many Chinese tourists have visited Taiwan in recent years.

² Quantile-on-quantile regressions are rather theoretical, so the method has still not become a standard tool in applications. This is the only limitation of our quantile-on-quantile model.

Additional information

Funding

This work was supported by the Ministry of Science and Technology in Taiwan [MOST 110-2410-H-130-048-].