On the Causal Nexus between Terrorism and Tourism: Empirical Evidence from the South Thailand Insurgency
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Abstract
The causal relationship between terrorism and tourism has long been debated in the literature. Using official monthly statistics on the number of death and casualty from South Thailand insurgency and the number of tourists entering the southern provinces of Thailand from January
2004 to June 2018, the causality between the two variables using the Autoregressive Distributed Lag model (ARDL) and Error Correction Model (ECM) are examined. Estimation results are in accord with other findings in the literature that terrorism has a negative causal impact on tourism in general. The study also finds a very strong evidence of mutual Granger causality that the number of tourists also affects the incidents of insurgency, a striking result that distinguishes this study from many others. In particular, an increase in the number of tourists
tends to decrease the incidence of insurgency, and that the estimated adjustment coefficient to the long run equilibrium is unusually high. The result partly uncovers the probable motive of the terrorists in Deep South Thailand that they may seek to create domestic disturbance while
minimizing conflict with other countries.
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