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ABSTRACT
This paper examines the business cycle of tourism market (BCTM) in Taiwan. It begins by studying the BCTM based on a Markov regime-switching (MRS) model. The MRS model reveals strong evidence of a regime-switching BCTM with two distinct regimes: a high-growth regime (HGR) and a low-growth regime (LGR), over the period from 1st quarter of 1969 to 1st quarter of 2011. The second step is to examine the driving forces of the BCTM. Specifically, the study identifies the factors that cause the tourism market to stay in the high-growth regime (HGR). Test results show that the growth rate of gross domestic product (GDP), growth rate of exports, and inflation rate are significant drivers of the BCTM in Taiwan.
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Notes on contributors
Ming-Hsiang Chen
Ming-Hsiang Chen is Professor in Department of Finance, National Chung Cheng University, No. 168, Sec. 1, University Rd., Min-Hsiung Township, Chia-yi County 62102, Taiwan, Republic of China (E-mail: [email protected]).
Chien-Pang Lin
Chien-Pang Lin is Assistant Professor in Department of Finance, Chang Jung Christian University Tainan, No. 1, Changda Rd., Gueiren District, Tainan City 71101, Taiwan, Republic of China (E-mail: [email protected]).
Brendan T. Chen
Brendan T. Chen is Associate Professor in Department of Leisure Industry Management, National Chin-Yi University of Technology, No. 57, Sec. 2, Zhongshan Rd., Taiping District, Taichung 41170, Taiwan, Republic of China (E-mail: [email protected]).