Research Note: Contribution of Foreign Direct Investment to the Tourism Sector in Fiji: An Empirical Study

In the midst of declining external demand due to the world economic downturn since 2008, the tourism sector has emerged as a major source of support to the South Pacific island countries, including Fiji. Tourists from the region's two advanced economies, Australia and New Zealand, find Fiji a m...

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Bibliographic Details
Published in:Tourism economics : the business and finance of tourism and recreation 2014-12, Vol.20 (6), p.1357-1362
Main Authors: Jayaraman, T. K., Chen, Hong, Bhatt, Markand
Format: Article
Language:English
Subjects:
Asia
Australia
Cointegration analysis
Devaluation
Earnings
Economic crisis
Europe
Fiji
Foreign direct investment
Foreign investment
Hotels & motels
Islands
New Zealand
Resorts & spas
Studies
Tourism
Tourist trade
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Summary:In the midst of declining external demand due to the world economic downturn since 2008, the tourism sector has emerged as a major source of support to the South Pacific island countries, including Fiji. Tourists from the region's two advanced economies, Australia and New Zealand, find Fiji a more affordable tourist destination than distant European and Asian holiday resorts. The development of the tourism sector in Fiji owes much to foreign direct investment (FDI) in hotels, resorts and other infrastructural facilities. This paper uses bounds cointegration technique and investigates the contribution of FDI to Fiji's tourism sector. The analysis identifies positive associations between FDI and tourism earnings as well as between currency depreciation and tourism earnings.
ISSN:1354-8166
2044-0375
DOI:10.5367/te.2013.0358