THE IMPACT OF THAI TOURISM ON THE ECONOMIC GROWTH OF TOURISM IN LAO PDR: A HIERARCHICAL APPROACH

Abstract

This study examines the relationship between the economic growth of tourism in Lao PDR, and the number of Thai tourists visiting Lao PDR, international trade and the exchange rate by employing a hierarchical model using quarterly data from Q1 2000 – Q1 2012. It was found that the number of Thai tourists visiting Lao PDR has both short and long run causality on the GDP of tourism. This result shows that Thai tourists are important and has a causal relationship with the economic growth of tourism in Lao PDR. This study suggests that Lao PDR should maintain Thai tourist groups and create new tourism products to encourage Thai tourists to visit Lao PDR, which would contribute to the economic development of Lao PDR.