Terrorism and Tourism Demand in Terror Affected Island
DOI:
https://doi.org/10.58329/criss.v1i2.11Abstract
Abstract Views: 148
Sri Lanka is an island and is becoming an attractive tourist destination in South Asia. It has famous beaches, mountainous regions, many colonise features, UNESCO world heritage sites, wild life, traditional festivals, and unparalleled climate generate extra topographies to attract more and more international tourists. However, Sri Lanka is badly affected by terrorism. Henceforth, this study examines the impact terrorism on inbound tourism along with other important factors, for instance, FDI and World GDP. Long run estimates are obtained through DOLS after confirmation of cointegration. World GDP and FDI have positive effect on tourism. Terrorism has negative impact on inbound tourism in Sri Lanka. The tourism in Sri Lanka remained stagnant between 1978 and 2009 because of terrorism. Since 2009, there is sharped increase in tourism arrivals as a result of remarkable decrease in terrorism activities. Results of VECM confirmed causality from terrorism to tourism. This finding revealed that terrorism is badly affecting tourism in Sri Lanka. Similarly, terrorism is affecting FDI inflows to Sri Lanka. Moreover, these results confirmed that tourism and FDI are engaged in complementary effect with each other. If Sri Lanka enabled itself well to maintain peace in country its effect will be multiple. Elimination of terrorism will improve tourism development which in turn will bring economic development as travel and tourism industry contributes 11.1 % to GDP, and 10 % to country employment. Similarly, better security situation will also help in attracting more FDI. Besides this, FDI and private investment has to be encouraged to build new hotel rooms to accommodate influx of tourists.
Keywords:
Sri Lanka, Terror Affected Island, Terrorism, Tourism Demand
References
Arana, J. E. & Leon, C. J. (2008). The impact of terrorism on tourism demand. Annals of Tourism Research, 35(2), 299–315.
Dickey, D.A., & Fuller, W.A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74, 427–431.
Enders, W and T. Sandler (1991). Causality between Transnational Terrorism and Tourism: The case of Spain” Terrorism, 14, 49 – 58.
Enders, W., Sandler, T. and G.F. Parise (1992). An econometric analysis of the impact of terrorism on tourism. Kyklos, 45, 531–554.
Feridun, M. (2011). Impact of Terrorism on Tourism in Turkey: Empirical Evidence from Turkey. Applied Economics, 43, 3349-54.
Jayathilake, P.M.B. (2013). Determinants of demand for international tourism in Sri Lanka: An econometric evaluation. Sri Lankan Journal of Banking and Finance, 1(1), 53-65.
Johansen, S. & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration-with application to the demand for money. Oxford Bulletin of Economics 52, 169-210.
Lin, L. I., Gamage, S. K. N., & Nedelea, A. M. (2016). Does social capital influence resident’s attitudes towards tourism development in sri lanka?. Revista de turism studii si cercetari in turism, (22).
Naradda Gamage, S. K., Hewa Kuruppuge, R., & Haq, I. U. (2017). Energy consumption, tourism development, and environmental degradation in Sri Lanka. Energy Sources, Part B: Economics, Planning, and Policy, 12(10), 910-916.
National Consortium for the Study of Terrorism and Responses to Terrorism (START). (2015). Global Terrorism Database [Data file].
Ranasinghe, R., & Deyshappriya, R. (2012). Analysing the Significance of tourism on Sri Lankan economy; an econometric analysis. 3rd international conference on business and information- University of Kelaniya, Sri Lanka
Raza, S. A., & Jawaid, S. T. (2013). Terrorism and tourism: A conjunction and ramification in Pakistan. Economic Modelling, 33, 65–70.
Seddighi, H. R., Nuttall, M. W., & Theocharous, A. L. (2001). Does cultural background of tourists influence the destination choice ? An empirical study with special reference to political instability. Tourism Management, 22(2), 181-191.
Selvanathan, S., Selvanathan, E. A., & Viswanathan, B., (2012). Causality between Foreign Direct Investment and Tourism: Empirical Evidence from India. Tourism Analysis, 17 (1), 91-98.
Sonmez, S. (1998). Tourism, Terrorism, and Political Instability. Annals of Tourism Research.
Sri Lanka Tourism Development Authority (2022). The official site of Sri Lanka tourism.
Stock, J., & Watson, M. (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica, 61, (4), 783-820.
Tang, S., Selvanathan, E. A. & Selvanathan, S. (2007). The relationship between foreign direct investment and tourism: empirical evidence from China. Tourism Economics, 13(1), 25-39.
World Bank (2022). World development indicators.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 CARC Research in Social Sciences
This work is licensed under a Creative Commons Attribution 4.0 International License.
