Impacts of Thai baht on Tourism, Sectoral Final Demand and Sectoral Output in Thailand

BUNDIT, CHAIVICHAYACHAT (2014) Impacts of Thai baht on Tourism, Sectoral Final Demand and Sectoral Output in Thailand. In: International Conference on Advances In Economics, Management and Social Study - EMS 2014, 02 - 03 August, 2014, Kuala Lumpur, Malaysia.

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Abstract

The Thai baht had been volatile since the implementation of the managed floating system in July 1997. At the same period, expenditures of foreign tourists in Thailand had been the major sector that contributed a significant growth on Thai GDP and generated domestic final demand and final outputs. This paper aims to explore the impact of Thai baht on expenditures of foreign tourists in Thailand, sectoral final demand and sectoral output by using two-step approach cointegration, bridge matrix and input-output table. In the first section, the behavioral equation of expenditures of foreign tourists was estimated based on the annual data during 1997-2012. The results indicated that world GDP per capita, exchange rate and development of tourism sector significantly determined expenditures of foreign tourists . In contrast, domestic economic growth and political stability cannot explained the level of expenditures of foreign tourists with statistical significance. For every one baht depreciation against US dollar, expenditures of foreign tourists increased by 83.6 million baht. For the second section, the calculated final demand coefficients organized by 180 sector input-output table in 2005 shows that over 90 percent of aggregate final demand derived from expenditures of foreign tourists was contributed by only 14 sectors. For every one-baht depreciation, it contributed to various impact on sectoral outputs -- higher outputs in 147 sectors, lower outputs in 25 sectors, and unchanged outputs in 8 sectors. The last section was devoted to simulate the response of expenditures of foreign tourists, sectoral final demand and sectoral outputs on five scenarios of exchange rates ranging between 29-33 baht per US dollar. The results show that expenditures of foreign tourists will increase continuously during 2013-2016. However, there is a slight impact of the Thai baht on expenditures of foreign tourists, sectoral final demand and sectoral outputs. Based on the finding, the tourism authority should promote the policy that attracts the international tourists to Thailand and monitor the exchange rate closely in order to enhance the tourism sector for sustainable economic expansion.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Exchange rate, Tourism in Thailand, MacroIO Model
Depositing User: Mr. John Steve
Date Deposited: 28 May 2019 09:24
Last Modified: 28 May 2019 09:24
URI: http://publications.theired.org/id/eprint/2844

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