The Role of Sustainable Competitiveness Indicator in Malaysian Tourism and Economic Growth

• Main Authors: Soh, Ann Ni, Puah, Chin Hong, Mohammad Affendy, Arip, Jong, Meng Chang
• Format: Article
• Language: English
• Published: Sciendo 2024
• Subjects: HB Economic Theory
• Online Access: http://ir.unimas.my/id/eprint/47529/1/The-Role-of-Sustainable-.pdf; http://ir.unimas.my/id/eprint/47529/; https://sciendo.com/es/article/10.2478/sbe-2024-0053; https://doi.org/10.2478/sbe-2024-0053

This paper proposes a sustainable competitiveness indicator for the state of tourism vulnerability in the Malaysian tourism market. Further investigation has also been done on the timefrequency and lead-lag relationship of the indicator with tourism development and economic growth. The resultant indicator is consisted of 12 variables, identified based on the pillars of sustainability and competitiveness to extract a common vulnerability component using a dynamic approximate factor model. The model’s accuracy rate was at a promising 92% based on the variable importance assessment using random forest algorithms. Through the implementation of bivariate wavelet coherence analysis, the empirical results indicated that the constructed indicator has a positive leading role in Malaysian tourism development and economic growth. This indicator can be embedded within an early warning system to signify vulnerabilities in the Malaysian tourism market.