EVENT TOURISM DEMAND AND SELECTED MACROECONOMIC VARIABLES: AN ECONOMETRICS VIEW OF THE LONG-RUN AND SHORT-RUN RELATIONSHIPS

Assessing the substantial economic benefits of event tourism will provide insight into the effectiveness of tourism event in Malaysia. The significance of the tourism event sector has the potential to boost Malaysia's economic growth, increase the arrival of international tourists, increase tourist expenditure and further job creations. This study empirically investigates determinants of event tourism demand in Malaysia during the period of 1991Q1 to 2016Q4. The Autoregressive Distributed Lag (ARDL) technique is used to find the longrun cointegration relationships of the model. The model is further tested by employing diagnostic tests (Normality test, Serial Autocorrelation, Heteroscedasticity and Ramsey's RESET test) and stability tests (CUSUM and CUSUMSQ). The empirical analysis of the bounds test indicates that there is a long-run cointegration among the variables under study. Besides that, the ARDL model produces reliable results, as all of the computed coefficients of the independent variables are statistically significant with the expected signs. The findings are consistent with economic theory and the model passed all of the diagnostic tests. The findings of this study imply that event demand can be improved significantly when government spending, the exchange rate and tourist receipts increase and the crude oil price decreases. Hence, government authorities and the private sector should create an integrated plan to enhance the profit gained through the Malaysian economy from event tourism.