To analyze the factors affecting tourism receipts from global travelers: application of random coefficient model

Tourism industry in the global economy plays an increasingly important role, not only the direct economic contributions, but also as a drive to the promotion of international trade. As a result, tourism has become very important in the economic development for any economy, and the study of the economic factors about how tourism receipts from both domestic and abroad influence economic development have become an important issue. This paper uses an econometric model called random coefficient model (differential slope model) by utilizing panel data, in order to explore the cross-sectional differences of the fundamentals in terms of tourism receipts from international inbound travelers, economic growth, exchange rate volatility, trade openness and growth of tourist arrivals among countries. The empirical results show that the economic growth rate can be a positive impact to tourism receipts and under the policy leading to economic growth and stability of exchange rate volatility, an even higher growth rate in tourism receipts from international inbound travelers can be achieved.