THE HONG KONG POLYTECHNIC UNIVERSITY
RESEARCH DEGREE PROPOSAL学位研究论文议建
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1.Project Title项目名称：:
The Impact of International Tourism on Economic Growth: A Dynamic General Equilibrium Approach国际旅游对经济增长的影响：一个动态一般均衡性分析
2.Project Objectives: 项目目标 (Purpose of proposed investigation)
The main objectives of this research projects are:这个项目的主要目标是
1) To develop a comprehensive analysis framework for the impact of international tourism boom to the economic growth of host country. 形成关于国际旅游热潮对东道国的经济增长影响的综合性分析框架。
2) To testify whether the transmission mechanism of objective 1 is consistent with the real economic data.
Both of the objectives are aimed to explain how the international tourism can lead to the economic growth of the host country. 两个目标都是为了解释国际旅游是如何导致东道国的经济增长的。Tourism researchers and practitioners are both interested in this topic because of the following reasons. Firstly, the economic growth of some countries, especially the small or island countries depends very much on the inbound tourism. If researchers find the transmission mechanism runs from tourism to economic growth, the governments would know how to keep their growth in the steady path. Secondly, tourism development may improve the conditions of the labour market and current account even for a country that does not mainly depend on tourism. Thus the exploration of how tourism contributes to economic growth is not only valuable for small countries but also for large economies.
3.Scope and Background of Research: 研究的范围和背景
The research associated with the tourism and economic growth started from the 1990s. 对旅游和经济增长的相关研究开始于20世纪90年代。 The common conclusion has been that tourism has a positive effect on the economic growth of the host countries especially small countries. The literatures related to this topic can be pided into two groups from the methodology perspective which are positive analysis and empirical analysis. 与此主题相关的文献从方法论的角度可分为两组：积极分析和实证分析。
1) Positive Analysis积极分析
The earlier studies were mainly comparative analyses such as Copeland (1991) and Clarck &Ng (1993) . They found that the boom of tourist might result the increase of the non-tradable goods or services, improve the trade account and social welfare. Lanza & Pigliaru (1999) used Lucas (1988) model to examine the contribution of the tourism specialization to the economic growth with the help of the nature resource endowment in a close economy. However, they did not use the dynamic method of Lucas (1988)4 to study the equilibrium changes over time.
Hazari & Sgro (2004) firstly introduced the analysis of tourism and economic growth to the dynamic framework. Solow-Swan model and Ramsey model were used in Hazari & Sgro (2004, Chapter 10 & Chapter 11). They found that the growth of inbound tourism can improve the trade account so that the host economy could import and accumulate more capitals for economic growth. Furthermore, they also found that the possession of monopoly power of the local tourism in the global market is the necessary condition for sustained growth from abroad. After the pioneer work of Hazari & Sgro (2004)5, Ramsey model was widely used by researchers such as Schubernt & Brida (2009) with a one-sector model, Álvarez-Albelo & Hernández-Martín (2007) with a two-sector and calibrated model and Cerina (2007) for the environment issue. In addition, the AK model due to Romer (1986 , 1989 ) has also been widely used in the research of the contributions of international tourism to economic growth. For example, Lozano, Gómez & Rey-Maquieira (2008) used the AK model to improve the TALC hypothesis while Schubert & Brida (2011) employed the AK model to study the dynamic characters when investment adjustment function occurred.
The same conclusions have been achieved based on the above mentioned models. That is, the inbound tourism contributes to the economic growth of the host countries and the transmission mechanism is the improvement of the trade account. However, the models above all assumed that the labour market and the international tourism market are always clear. According to the Walras Law, only one market can be cleared automatically when other markets are clear, thus these models are all partial equilibrium models instead of general equilibrium models. More importantly, all these growth models ignore the uncertainty within the economy. That means the basic source of the economic transition is the aggregation shocks such as the technical improvement and no idiosyncratic risks exist or they are smoothed out in the aggregate economy. The lack of idiosyncratic risks is resulted from the assumption of the homogeneous agents. Thus, it is a new research direction to study the relationship between the inbound tourism and economic growth if the homogeneous agents are replaced by heterogeneous ones, i.e., the growth models should build in economic uncertainties.
2) Empirical Analysis实证分析
The empirical analysis of the contributions of international tourism to economic growth has been cantered on the Tourism-led Growth Hypothesis (TLGH) advocated by Balaguer & Cantavella-Jorda (2002) . There have been mainly three types of methods used to confirm the hypothesis: the time series approach, the panel data method and the computable general equilibrium model (CGE).
The Time Series Approach: 时间序列方法Johansen cointegration and Granger causality tests have been widely used to examine the causal relationship between tourism development and economic growth for some countries/regions such as Dritsaki (2004) for Greece, Dubarry (2004) for Mauritius, Oh (2005) for Korea, Gunduza & Hatemi-J (2005) and Katircioglu (2009) for Turkey, Kim et al (2006) and Lee & Chien (2008) for Taiwan, Balaguer & Cantavella-Jorda (2002)13 and Nowak et al(2007) for Spain, Chen & Song (2009) for Korea and Taiwan and Schubernt et al (2011) for Antigua and Barbuda. However, the research findings are inconclusive even for the same destinations studied (see, for example, Gunduza & Hatemi-J, 200517 and Katircioglu, 200918 for Turkey; Oh, 200516 and Chen & Song, 200922 for Korea).
The Panel Data Method: 面板数据法：Sequeira & Campos (2005) and Proenca & Soukiazis (2008) employed the static panel data model to examine the TLGH with contradicting results. Eugenio-Martín et al (2004) estimated a dynamic panel data model and found that TLGH could only be supported for the low and medium income countries in Latin America. Similar method was also used by Fayissa et al (2007) to test TLGH for 42 Africa countries and by Cortés-Jiménez (2008) for regions in Spain and Italy. Both studies confirmed that TLGH was supported not only for the whole sample but also for the sub-samples. Lee & Chang (2008) applied cointegration and Granger causality tests based on the panel data models and found that TLGH was supported for 23 OECD and 32 non-OECD countries
The CGE Model: CGE模型： In order to show the internal transmission mechanism, the CGE model has been used by researchers such as Zhou et al (1997) . To obtain the accurate production factor data, a survey was firstly carried out in the model of Blake & Sinclare (2006) . In addition, Blake (2009) used a dynamic CGE model to study the impacts of anticipated and unanticipated tourism booms to the economy. The dynamics of the Blake (2009)32 CGE model mainly came from the capital accumulation, which means that only one state variable exists in the model. Since the main data source of CGEs is the input-output tables which are normally published in frequently, there is still a long way to go for the CGE models in studying the contributions of inbound tourism to economic growth.
In summary, the inconclusive results generated by these empirical studies present a real dilemma for researchers. One the one hand, although the theoretical models have proposed a causal relationship running from tourism to economic growth, the evidence obtained from the empirical studies cannot proof the existence of such a relationship. On the other hand, even if the economic data for some countries/regions confirmed such a relationship, no research has been done to illustrate how this relationship actually works. The Bayesian estimation of dynamic general equilibrium (DGE) models may be able to solve this problem and serve as a new research direction in testing the contribution of the international tourism to the host country/region’s economic growth.
4.Research Methodology:研究方法
The maim methodologies used in this research are as follows.这次研究中的主要方法如下
1) Economic Modelling经济模型
In order to explore the impact of tourism on the economic growth, the growth models both with certainty and uncertainty will be employed in this research. The development path of the models can be found in Table 1.
2) Numerical Solution数值解法
The DGE models can be seen as a system of nonlinear differential equations. Because of the complex model structure, only numerical solutions can be obtained in most of the cases by dynamic programming with the assistance of computers. When solving the growth models with certainties, the nonlinear differential system can be transformed to linear forms by various linearization methods such as log-linearization. When dealing with the models with uncertainties, only nonlinear solution techniques such as Perturbation Techniques (Dejong & Dave, 2011) can be used.
3) Bayesian Estimation贝叶斯估计
The likelihood function for Bayesian estimation can be written as
where is a vector of parameters with the prior density of and is the data that can be observed. The maximum likelihood method is to search a parameter value to maximize the . Using the Bayesian rule, we can get the posterior function as
The Bayesian estimation is to choose the parameters so as to maximize the posterior density . There is another problem left. When evaluate the likelihood function, Kalman filter is often used after the linearization to the model. Thus when dealing with the growth models with uncertainties which cannot be linearized, the Efficient Importance Sampling (EIS)33 filter has to be used. The posterior kernel can then be simulated by Markov Chain Monte Carlo (MCMC) method such as the Metropolis-Hastings algorithm.
4) Data Description数据描述
In this research, quarterly data of some tourism dominant countries such as Fiji, Spain and New Zealand will be collected from official sources. The number of the observations is subjected to the data availability. The variables involved in the research mainly include capital stock, investment and employment in both the tourism and non-tourism industries, tourism output, aggregate output (GDP) and the exchange rate, etc... Since some of the tourism specific data, such as tourism employment and tourism investment, may not be available, the tourism satellite accounts of Spain and New Zealand will be the source of data collection
5) Research Plan研究计划
This research is planned to complete in 3 years (36 months) which is pided into 4 sub-periods.
① Literature review
② Economic modelling and analysis of the economic growth models with certainties
③ Economic modelling and analysis of the economic growth models with uncertainties
④Summarize and write up the research findings
5.Project Significance and Value:项目的重要性和价值
The contributions of this research are twofold. 本研究的贡献是双重的。
1) The research will expand the current tourism-led economic growth models by incorporating the general equilibrium assumption and uncertainties. 这项研究通过将一般均衡假设和不确定性相结合将扩大现有的旅游产业为主导的经济增长模式。With the introduction of idiosyncratic risks to the growth model, this research would be more relevant and realistic to the impacts of international tourism on the economic growth.
2) This research will fill in gap between the current theoretical models and the empirical research using Bayesian DGE approach. 本研究利用贝叶斯DGE方法之将填补目前理论模型和实证研究之间的差距。 Based on the Bayesian method, we can find out whether the current theoretical models are consistent with the data and identify the most suitable model for capturing the transmission mechanism between international tourism and economic growth.
6.References参考文献
[1] Copeland, B. R. (1991). Tourism, Welfare and De-industrialization in a Small Open Economy, Economica, 58:515-529.
[2] Clarke, H. and Y. Ng (1993). Tourism, Economic Welfare and Efficient Pricing, Annals of Tourism Research 20:613-632.
[3] Lanza, A. and F. Pigliaru (1999). Why Are Tourism Countries Small and Fast-growing, CRENos Workingpaper 199906.
[4] Lucas, R. (1988). On the Mechanics of Economics Development, Journal of Monetary Economics 22:3-42.
[5] Hazari, B. R. and P. M. Sgro (2004). Tourism, Trade and National Welfare: Contributions to Economic Analysis. US&UK: ELSEVIER.
[6] Schubernt, S. F. and J. G. Brida (2009). Macroeconomic Effects of Changes in Tourism Demand: a Simple Dynamic Model, Tourism Economics 15(3):591-613.
[7] Álvarez-Albelo, C. and R. Hernández-Martín (2007), Explaining High Economic Growth in Small Tourism Countries with a Dynamic General Equilibrium Model. XREAP Working Paper No. 2007-6.
[8] Cerina, F.(2007). Tourism Specialization and Environmental Sustainability in a Dynamic Economy, Tourism Economics 13(4):553-582.
[9] Romer, P.G. (1986). Increasing Returns and Long-Run Growth, Journal of Political Economy 94:1002-1037.
7.Statement of the Applicant申请人声明
I wish to register for a research degree on the basis of the proposal given in this Form (RDC/1A).I understand that, during the period of my registration with the University, I may not be a candidate for any other degree or award.I understand that, except with the specific permission of the Research Committee, I must prepare and defend my thesis in English. (You are required to seek permission if another language, which is considered more appropriate to the subject, is to be used in the presentation of the thesis. Please submit the justification together with this application)I undertake to abide by the general regulations of the University.
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9、Recommendation of Head of Affiliated Department in the University大学附属部门负责人的建议
I support this application, and confirm to the best of my knowledge that adequate facilities will be provided to enable the student to conduct and complete the research programme in an efficient and safe manner. I also agree to provide adequate research space for the applicant during the research programme.