TOURISM AND OPENNESS TO MERCHANDISE AND SERVICES TRADE IN SINGAPORE: AN EMPIRICAL INVESTIGATION
Koi Nyen Wong
Tuck Cheong Tang
Tourism has been identified as one of the key growth sectors in Singapore economy. Given that the city state has been recognised as one of the most open economies in the world, this study attempts to explore the causality relationships between tourism, openness to merchandise and services trade. Firstly, the study shows bi-direction causality between international visitor arrivals to Singapore and openness to merchandise trade. Secondly, there is a unidirectional causality from openness to services trade to international visitor arrivals to Singapore. The findings imply that further trade liberalisation in goods as well as services sectors can be seen as an important catalyst for the growth, and development of the tourism sector. Conversely, an increase in tourism activities could also encourage the host country to open itself to more international trade. Furthermore, it is imperative to liberalise the services sector in Singapore in order facilitate more openness in merchandise trade given a large scale of services constitutes goods trade.
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