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Exploring the Nexus between Trade, Visitor Arrivals, Remittances and Income in the Pacific: a Study of Vanuatu
Acta Universitatis Danubius. Œconomica (2011)
  • Ronald R Kumar
  • Vijay Naidu
  • Radika Kumar
Abstract
We explore the contributions of trade openness, remittance inflows and expansion in tourism towards improving income in Vanuatu over the periods 1983-2009 using the augmented Solow approach and the ARDL bounds test. The results show trade openness and remittances have a positive and statistically significant effect on the long run growth of the economy while tourism expansion is not statistically significant. For a broad-based development policy we propose: remittance inflows need to be encouraged and additional remittance markets to be explored; trade negotiations with specific focus on temporary movement of natural persons need to be prioritized; and ensuring access to financial services and technology to rural and outer islands in Vanuatu. To confine to diversity of the economy, there is a further need to develop tourism infrastructure besides putting policies in place to ensure that tourism sector operations benefit trickle down to the grassroots level of the society.
Keywords
  • economic growth,
  • tourism expansion,
  • ARDL Bounds Test,
  • Vanuatu
Publication Date
December, 2011
Citation Information
Ronald R Kumar, Vijay Naidu and Radika Kumar. "Exploring the Nexus between Trade, Visitor Arrivals, Remittances and Income in the Pacific: a Study of Vanuatu" Acta Universitatis Danubius. Œconomica Vol. 7 Iss. 4 (2011)
Available at: http://works.bepress.com/ronald_ravinesh_kumar/11/