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Jurnal Ekonomi Malaysia

57 (3) 2023 17 – 31

How Do Macroeconomic Stability and Environmental Concerns Affect International Tourism Demand in Bangladesh? Insights from Linear and Nonlinear Approach

Department of Finance and Banking
Jashore University of Science and Technology
Jashore – 7408, BANGLADESH.

nishat.du17@gmail.com

Department of Finance and Banking
Jashore University of Science and Technology
Jashore – 7408, BANGLADESH.

Department of International Business
University of Dhaka
Dhaka 1205, BANGLADESH.

uttamgolder@gmail.com

Department of Finance and Banking
Jashore University of Science and Technology
Jashore – 7408, BANGLADESH.

mdshanurrahman.jnu@gmail.com

Department of Management
Jashore University of Science and Technology
Jashore – 7408, BANGLADESH.

zimran.ru@gmail.com

Department of Accounting and Information Systems
Jashore University of Science and Technology
Jashore – 7408, BANGLADESH.

jahangir.sr_ais@just.edu.bd

Abstract

This study aims to analyze the impact of income level, environmental pollution, inflation, currency rate, and crude oil price on international tourism demand in Bangladesh. Scrutinizing the quarterly data from 1995 to 2019 and using the Autoregressive Distributed Lag (ARDL) and nonlinear Autoregressive Distributed Lag (NARDL) models, this study divulges a long-run linear and nonlinear link among variables. The nonlinear model states that the positive fluctuations of inflation and oil prices harm tourism, while the positive changes in exchange rates respond positively. Conversely, the negative inflation and exchange rate shocks adversely affect tourism demand, while negative changes in oil prices affect it positively. Additionally, in both models, the visiting country’s income level and Bangladesh’s environmental pollution significantly affect tourist arrival. The study recommends that the Government should seek renewable engine fuels and decrease CO2 to boost sustainable tourism demand. Besides, policymakers should keep the exchange rate stable by controlling the economy’s money supply and increasing reserves by attracting remittances and alluring exports.

 

Keywords

asymmetric relation; Bangladesh; environmental pollution; macroeconomic factors; tourism demand

JEL Codes

F2 F6, M2, N1, N3, N7.
http://dx.doi.org/10.17576/JEM-2023-5703-02
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Bibliography

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Rumaly, N., Golder, U., Rahman, M. S., Sheikh, M. I., & Alam, M. J. (2023). How Do Macroeconomic Stability and Environmental Concerns Affect International Tourism Demand in Bangladesh? Insights from Linear and Nonlinear Approach. Jurnal Ekonomi Malaysia, 57(3), 17–31. http://dx.doi.org/10.17576/JEM-2023-5703-02

@article{rumaly2023how,
  title={How Do Macroeconomic Stability and Environmental Concerns Affect International Tourism Demand in Bangladesh? Insights from Linear and Nonlinear Approach},
  author={Rumaly, Nishat and Golder, Uttam and Rahman, Md. Shanur and Sheikh, Md. Imran and Alam, Mohammad Jahangir},
  journal={Jurnal Ekonomi Malaysia},
  volume={57},
  number={3},
  pages={17—31},
 

year={2023},
}

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