Financial Risk and International Inbound Tourism: A Malaysian Illustration

The impact of financial risk on inbound tourism is explored in this study by examining the effect shocks foreign debt level and service stability tourist arrival rate Malaysia, based Theory Planned Behavior (TPB). Quarterly data from 2010 to 2020 were obtained multiple sources, which include Malaysia Tourism corporate website, official portal Ministry Economy Department Statistics Federal Reserve (FRED) Economic statistical website. A VAR model was estimated, together with Granger causality test, identify relationship between risk, control variables, Malaysia. We specifically consider effects estimated impulse responses variance decompositions for studied variables. Empirical results indicate that there a unidirectional running stability, industrial production arrivals. In addition, also bidirectional effective exchange arrivals rate. This first its kind explore risks context levels emphasizes importance monitoring country’s financing threshold maintain if violated would be detrimental tourism.