The Role of Sustainable Competitiveness Indicator in Malaysian Tourism and Economic Growth

Soh, Ann Ni and Puah, Chin Hong and Mohammad Affendy, Arip and Jong, Meng Chang (2024) The Role of Sustainable Competitiveness Indicator in Malaysian Tourism and Economic Growth. Studies in Business and Economics, 19 (3). pp. 228-240. ISSN 2344-5416

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Abstract

This paper proposes a sustainable competitiveness indicator for the state of tourism vulnerability in the Malaysian tourism market. Further investigation has also been done on the timefrequency and lead-lag relationship of the indicator with tourism development and economic growth. The resultant indicator is consisted of 12 variables, identified based on the pillars of sustainability and competitiveness to extract a common vulnerability component using a dynamic approximate factor model. The model’s accuracy rate was at a promising 92% based on the variable importance assessment using random forest algorithms. Through the implementation of bivariate wavelet coherence analysis, the empirical results indicated that the constructed indicator has a positive leading role in Malaysian tourism development and economic growth. This indicator can be embedded within an early warning system to signify vulnerabilities in the Malaysian tourism market.

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