Proceedings of the 2nd International Conference of Business, Accounting and Economics, ICBAE 2020, 5 - 6 August 2020, Purwokerto, Indonesia

Research Article

How Much Does Trade Activities Improve International Tourism Demand? Evidence from Indonesia

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  • @INPROCEEDINGS{10.4108/eai.5-8-2020.2301170,
        author={Adi Mahendra Darmawan and Muhammad Nabiel Arzyan and Muhammad Faiz Zaidan Alharkan and Akhmad  Darmawan},
        title={How Much Does Trade Activities Improve International Tourism Demand? Evidence from Indonesia},
        proceedings={Proceedings of the 2nd International Conference of Business, Accounting and Economics, ICBAE 2020,  5 - 6 August 2020, Purwokerto, Indonesia},
        publisher={EAI},
        proceedings_a={ICBAE},
        year={2020},
        month={10},
        keywords={international tourism trade in value added international trade indonesia},
        doi={10.4108/eai.5-8-2020.2301170}
    }
    
  • Adi Mahendra Darmawan
    Muhammad Nabiel Arzyan
    Muhammad Faiz Zaidan Alharkan
    Akhmad Darmawan
    Year: 2020
    How Much Does Trade Activities Improve International Tourism Demand? Evidence from Indonesia
    ICBAE
    EAI
    DOI: 10.4108/eai.5-8-2020.2301170
Adi Mahendra Darmawan1,*, Muhammad Nabiel Arzyan1, Muhammad Faiz Zaidan Alharkan1, Akhmad Darmawan2
  • 1: University of Gadjah Mada
  • 2: University of Muhammadiyah Purwokerto
*Contact email: adimahendra.dar@gmail.com

Abstract

This study aimed to investigate the relationship between international trade and international tourism demand in Indonesia. This research combined dataset of 31 countries from 2005-2015, and use the Generalized Method of Moments (GMM) estimation to take down the notions of endogeneity, heteroscedasticity, and serial correlation. Furthermore, this study tried to fill the literature gap from have not examined the comparison between two proxy of international trade data, conventional measure, and Trade in Value Added (TiVA), particularly in Indonesia. Based on the estimation, both indicators have a positive and significant relation with foreign tourist arrivals. Besides, we found that the TiVA measure was more potent than current data. These findings could be useful as complementary of government strategies in order to enhance the country trade as well as stimulate Indonesia’s inbound tourism.