Revisiting the nexus between tourism and GDP for Cambodia: insights from symmetric and asymmetric causality models

Cambodia's tourism-driven economy is highly sensitive to the volatilities in visitor arrivals, potentially causing significant macroeconomic instability. In this backdrop, the present study delves into the complicated relationship between tourist arrival volatility and gross domestic product (GDP) volatility using a series of time-varying causality (TVC) approaches. By considering symmetric TVC, we have found that the symmetric causality holds from volatilities in tourist arrival to volatilities in GDP for the 13, 21 and 27 sub-sample periods out of total 30 sub-sample periods. Outside of this period, we find there is very limited evidence that tourism volatility leads to GDP volatility. Same trend of limited and significant sub-sample period has been observed for the asymmetric causality between the mentioned variables. These findings paint a nuanced picture, highlighting the complexity and evolving nature of the tourism-GDP volatility relationship in Cambodia.