Co-integration and causality analysis between tourism sector and GDP in Cambodia

Tourism sector has emerged as one of the most important service sectors in the global economy including Cambodia especially in recent 25 years, benefiting destinations and communities worldwide.

The objective of this chapter is to investigate and analyze the contribution of tourism sector in economic development in Cambodia.

After the cessation of conflict and the starting to establish political stability in 1993, the tourism sector has started to be a significant and very dynamic engine of economic growth and generator of foreign exchange revenues in Cambodia.  For this reason, this study covers the period after the early 1990s when Cambodia opened its door to the world.

In this study, the relationship between Cambodian tourism receipts and gross domestic product (GDP) growth rate is analyzed. Johansen Co-integration Test was performed to identify whether there was a long term relationship between the variables. Than Vector Error Correction Mechanism (VECM) was used to identify existence of short run relationship between variables. Finally, residual tests were performed to check how the model is stable and desirable.  E-views 8 statistical program is used for data analysis.

According to the results of the study, Johansen Co-integration Test verifies that GDP, Tourism receipts and Export revenues have long term association. The VEC Granger Causality/Block Exogeneity Wald Tests show that the causality from tourism receipts to GDP is statistically significant. And also this study shows that the tourism policies and the tourism revenues are more effective on the GDP than the export policies and the revenues.


Research Team

Prof.Dr.Osman Nuri Aras

Independent Researcher

Assoc.Dr.Mustafa Ozturk

Independent Researcher

Dr.Ali Ihtiyar

Department of Business Administration, Zaman University, Phnom Penh, Cambodia