National Accounting Review (Dec 2020)
Vietnam's sustainable tourism and growth: a new approach to strategic policy modelling
Abstract
The paper introduces a new approach to develop a model of endogenous tourism and growth for Vietnam and, estimated by official national accounting data, provides credible inputs for strategic policy analysis. The country is a major transition high-growth ASEAN economy and a WTO member with successful opening up policies since its Doi Moi (Renovation) reform in 1987. Significantly, due to these policies and its natural, historical and cultural attractions, Vietnam has also been receiving in recent years increasing tourist inflows with substantial contribution to its national income. In spite of these developments, appropriate and rigorous studies of Vietnam's tourism and impact on growth have been very limited. The paper addresses this gap. As a significant innovative feature, the study is carried out appropriately from an economic integration growth framework, which is also the expenditure (as opposed to conventional production or income) perspective of the United Nations System of National Accounts 1993/2008. The model is a multi-simultaneous equation model of Vietnam's endogenous growth and tourism determination. It explicitly incorporates gravity theory and classical consumer demand contributors, Ironmonger-Lancaster new commodity attributes and importantly Johansen policy impact add- and sub-factors in its specification. The model is then estimated by system methods with official 1997–2017 economic and tourism data from the World Tourism Organisation and other international agencies. The research will advance the literature and the findings will provide useful new, appropriate and evidence-based causal insights on the determination and contributors of tourism to Vietnam's growth. Recommendations will be made for key stake-holders such as tourism policy-makers, academic analysts and tourism operators for strategic policy analysis and practical implementation. The approach is of the economic integration modelling class and generic, and has wide applications in the field.
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