International Journal of Business and Management Study
Author(s) : BUNDIT CHAIVICHAYACHAT
For the long journey of Thai’s economy, tourism sector is one of the major source of revenue even in the period of crisis or in the midst of the turbulence time. Especially, in the past two decades, the major economic factors including exchange rate, economic growth and political condition become more volatile but the foreign tourism revenue still growing with positive trend. Therefore, the objective of this paper is to explore the impacts of the changing in macroeconomic factors on foreign tourism revenue and sector output in Thailand after the financial crisis in 1997. In order to achieve the objective, the analytic framework was set up based on the estimation of behavioral equation and the calculation of input-output table. For the first step, the behavioral equation of foreign tourism revenue was specified and estimated by OLS together with the Engle and Granger cointegration test. Based on the annual data during 1998-2013, foreign tourists income, Thai’s economic growth, exchange rate (Baht:US dollar), trade openness, number of foreign tourists and political condition were determined the foreign tourism revenue with statistically significance and also satisfied the long-run relationship concept. After the estimation of the behavioral equation, for the second step, the 2005 inputoutput table of Thai economy was employed to calculate the final demand and sectoral output in 180 sectors. A bridge matrix was computed to distribute the aggregate foreign tourism revenue into the sectoral foreign tourism revenue. The sectoral revenue and the Leontief’s inverse matrix were used to calculate the final output. Then, the final step is the simulation of the impact of the changing in macroeconomic variables, including exchange rate, Thai’s economic growth and political condition, on sectoral output. Based on the simulation for the various scenarios, the results indicate that the political instability is the major macroeconomic variable which contributes the highest negative impact on foreign tourism revenue and sectoral output. For the changing in exchange rate (Baht: US dollar) and in economic growth, these two variables generate a slice impact on foreign tourism revenue and sectoral output. Therefore, the tourism authorities of Thailand should promote confidence of the tourist during the period of political instability in order to relief the negative impact on Thai’s economy.