The Analysis of the Relationships of Korean Outbound Tourism Demand: Jeju Island and Three International Destinations
Joo Hwan Seo, Sung Yong Park, Larry Yu
Tourism Management 30, 2009, 530-543
#002100 20131014 (published)
This paper investigates the determinants of the relationship among Korean outbound tourism demand for Jeju Island and three other Asian island countries using the multivariate generalized autoregressive conditional heteroskedasticity (MGARCH) and Vector Error Correction (VEC) models. It is found that pairwise conditional correlations among tourism demand for Jeju, Thailand, Singapore and the Philippines are not constant but time varying. Estimated conditional correlations among Jeju and the three Asian countries are negative over some time periods. This implies that the three Asian countries are substitutes for Jeju in certain specific time horizons. The VEC model is used to investigate the short-run and long-run dynamic relationships and the results reveal that Industrial Production Index and real exchange rates had the positive or negative impact on conditional correlations of tourism demand for these destinations. Tourism policy implications are discussed for managing tourism demand for these destinations.
Keywords: Dynamic conditional correlation; Multivariate GARCH; Vector error correction model; Jeju Island; Korean outbound tourism

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