Investigating the influence of terrorism, and military expense on tourism in India: empirical evidence using dynamic ARDL simulations
by Soumen Rej; Arunava Bandyopadhyay; Mohidul Alam Mallick; Nasiru Inuwa; Md. Emran Hossain
International Journal of Tourism Policy (IJTP), Vol. 13, No. 4, 2023

Abstract: This study uses data from 1980 to 2017 to examine the impact of terrorism, military expenditure and capital formation on tourism in India. For this purpose, dynamic autoregressive distributed lag (DARDL) estimates and Fourier frequency causality methods of Toda & Yamamoto are used. The results show that terrorist incidents and their squared term have a positive and negative impact on foreign tourist arrivals, respectively, indicating the presence of an 'inverted U-shaped' link between the two variables. In addition, military expenditure and its squared term are found to have a negative and positive influence, respectively, on foreign tourist arrivals, indicating the existence of a 'U-shaped' relationship between military expenditure and foreign tourist arrivals. The turning point is 181 terrorist incidents and 3.24% of GDP in military expenses. In addition, capital formation has a significant positive impact on foreign tourist arrivals, while the coefficient of the interaction term between terrorist incidents and military expenditure is negative in both the short and long run. Moreover, the results reveal a bidirectional causal relationship between tourist arrivals and terrorist incidents.

Online publication date: Thu, 13-Jul-2023

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