A Dynamic Panel Data Analysis of the Immigration and Tourism Nexus

There is a growing number of studies investigating the tourism migration nexus from a theoretical perspective. The empirical literature on the topic however, lags behind. The aim of this paper is to test for the effect of immigration on tourism and to estimate tourism immigration elasticities. The dynamic panel data cointegration technique is applied to model international arrivals for Australia. The results establish the relationship between immigration and tourism and show that trends in immigration influence arrivals to Australia. The estimated short-run and long-run migration elasticities are 0.028 and 0.09 respectively. These have implications for destination managers who can improve the efficiency of their planning exercises by incorporating additional information on immigration in their policy formulation.