Foreign tourist arrivals in India from major source countries: an empirical analysis

Abstract

The tourism industry is a significant contributor to the world economy and needs to be carefully evaluated for impact by influencing factors such as external shocks. Several practical implications are associated with the testing of the unit root hypothesis in the context of foreign tourist arrivals in India. For instance, if the unit root process is followed, it implies that shocks to foreign tourist arrivals are permanent in nature rather than temporary. This study employed a battery of time series unit root tests in an attempt to examine whether foreign tourist arrivals in India from 17 major source countries between 1981 and 2012 were permanently or temporarily affected by shocks. The empirical results of this study revealed that shocks to foreign tourist arrivals in India from eight source countries have only a temporary effect and shocks form rest of nine countries have permanent impact. It may therefore be concluded that the government should focus on long-term solutions for those eight source countries where the null hypothesis of unit root is rejected in order to promote international tourist arrivals rather than implementing temporary measures.

Keywords:

• India
• unit root
• structural break

JEL Classification:

• C32
• L83
• O40

Acknowledgements

Authors are grateful to the anonymous referee for useful comments. Views expressed in this article are personal. Usual disclaimers apply.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Aviral Kumar Tiwari http://orcid.org/0000-0002-1822-9263

Notes

1 http://indiabudget.nic.in.

2 Source: Union Budget of India website. Retrieved March 18, 2016 from http://indiabudget.nic.in/budget.asp.

3 This is an excerpt from the Hindu Scriptures, essentially meaning that the guests to a household should be treated by the household members as lovingly and as reverentially as one would treat God. In the context of the whole country, this means that the tourists coming to India should be treated with utmost love and respect.

4 http://www.wttc.org/news-media/news-archive/2013/World, Travel and Tourism Council Indian report.

5 This section is heavily drawn from the study Narayan and Popp (2010).