Causality between European Economic Policy Uncertainty and Tourism Using Wavelet-Based Approaches

2018 ◽  
Vol 58 (8) ◽  
pp. 1347-1356 ◽  
Author(s):  
Tsung-Pao Wu ◽  
Hung-Che Wu
Keyword(s):  
Economic Policy ◽  
Annual Data ◽  
Policy Uncertainty ◽  
Causality Analysis ◽  
Economic Policy Uncertainty ◽  
Causal Influence ◽  
European Economic ◽  
Continuous Wavelets ◽  
The Government ◽  
Wavelet Coherency

This article aims to examine the link between European economic policy uncertainty (EPU) and tourism activities in Portugal, Ireland, Italy, Greece, and Spain using wavelet transform context structures. This innovative technique allows the decomposition of time-series at different time frequencies. In this work, we used continuous wavelets, wavelet coherency, and wavelet phase difference based on Granger causality analysis to investigate the relationship between European EPU and tourism using the annual data from 1995 to 2015. The results indicate that there is a unidirectional causal influence of European EPU on international tourism receipts (ITR) in the short run and a bidirectional causal influence of European EPU on ITR in European countries in the long run. Accordingly, it can be recommended that the government needs to increase and promote tourism demand and to further provide and nurture the expansion of tourism supply.

Global Economic Policy Uncertainty and Tourism of Fragile Five Countries: Evidence from Time and Frequency Approaches

2020 ◽  
pp. 004728752092124
Author(s):  
Tsung-Pao Wu ◽  
Hung-Che Wu
Keyword(s):  
Economic Policy ◽  
National Security ◽  
High Frequency ◽  
Annual Data ◽  
Frequency Change ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
The Government ◽  
Changes Over Time ◽  
The Relationship

The purpose of this study is to examine the relationship between global economic policy uncertainty (GEPU) and tourism activities in the Fragile Five (F5) countries, namely, Brazil, India, Indonesia, South Africa, and Turkey. By using wavelet transform context structures and the annual data during the period of 1997–2016. The finding shows that the relationship is generally positive but changes over time, displaying low- to high-frequency cycles. Moreover, the timing and frequency change when GEPU co-moves with tourism. It can be recommended that the government maintain the national security and peace protocols.

Impact of economic sentiment and economic policy uncertainty on travel and leisure stock return

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abobaker Al.Al. Hadood ◽  
Farid Irani
Keyword(s):  
Economic Policy ◽  
Stock Returns ◽  
Stock Index ◽  
Policy Uncertainty ◽  
Medium Term ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
European Economic ◽  
The Uk ◽  
Stock Index Returns

PurposeThis paper considers the role of economic sentiment and economic policy uncertainty (both domestic and European) in explaining the changes in the contemporaneous and future travel and leisure stock index returns in top European Union (EU) tourism destinations, namely, in France, Germany, Spain and the UK.Design/methodology/approachThe authors conducted the ordinary least square (OLS) regression estimations to investigate the impact of changes in economic sentiment and economic policy uncertainty on travel and leisure stock returns. Furthermore, the authors used predictive regressions to determine whether economic sentiment and economic policy uncertainty are useful predictors over the short- or medium-term for travel and leisure stock returns.FindingsEmpirical results revealed that, in France and Spain, the changes in regional economic sentiments predominantly and positively affected travel and leisure stock index returns. Also, results indicated that changes in European economic sentiment have a strong positive effect on the future travel and leisure stock returns in Spain and the UK over the short run, while in France, changes in European economic policy uncertainty have a weak negative effect on the future travel and leisure stock returns over the medium-term.Research limitations/implicationsThis paper provides valuable practical implications for investors who trade travel and leisure stocks. Traders can use economic sentiment and economic policy uncertainty to establish arbitrageur strategies.Originality/valueThis study is the first to examine the effects of economic sentiment and economic policy uncertainty (both domestic and European) on contemporaneous and future travel and leisure stock returns in a top European tourism destination.

The Nexus Between Economic Policy Uncertainty and Stock Returns of Tourism Companies: Evidence from Turkey

2020 ◽  
Vol 23 (3) ◽  
pp. 87-98
Author(s):  
Alper Aslan ◽  
Buket Altinöz
Keyword(s):  
Economic Policy ◽  
Stock Returns ◽  
Policy Uncertainty ◽  
Causality Test ◽  
Economic Policy Uncertainty ◽  
European Economic ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Demand Models

This article aims to analyze the nexus between economic policy uncertainty (EPU) and stock returns of tourism companies for Turkey by using the Autoregressive Distributed Lag (ARDL) boundary test for data from 1997 to 2017. The analysis results illustrate that an increase in the global and European economic policy uncertainty index affects negatively to Borsa Istanbul (BIST) tourism index in Turkey in both the short and long run. In addition, global economic policy uncertainty has a greater impact on stock returns of tourism companies in the long run than European economic policy uncertainty. The causality test results support this statement and illustrate a unidirectional causality from global economic policy uncertainty to BIST Tourism Index (XTRZM). These findings proved that Turkey is not only for Europe but also a tourism center, globally. Analysis results implied that especially global economic policy uncertainty is a factor that should be taken into account to explain tourism stock returns. This article proposes that it will be useful to use the EPU index, especially global EPU, as a determinant of tourism stock returns. This result takes the existing theoretical infrastructure one step further than traditional tourism demand models.

scholarly journals Enterprise Sustainability: Economic Policy Uncertainty, Enterprise Investment, and Profitability

2020 ◽  
Vol 12 (9) ◽  
pp. 3735 ◽  
Author(s):  
Aijun Guo ◽  
Haiqi Wei ◽  
Fanglei Zhong ◽  
Shuangshuang Liu ◽  
Chunlin Huang
Keyword(s):  
Sustainable Development ◽  
Economic Policy ◽  
Inhibitory Effect ◽  
Investment Behavior ◽  
Policy Uncertainty ◽  
Dynamic Interactions ◽  
The Sustainable Development ◽  
Economic Policy Uncertainty ◽  
The Government ◽  
Enterprise Investment

Under economic fluctuations, the sustainable development of enterprises is crucial. Currently, there are few studies on the interaction between economic policy uncertainty (EPU) and the sustainable development behavior of enterprises. Based on a panel vector autoregressive (PVAR) model, this paper explores the static and dynamic interactions among EPU, enterprise investment, and enterprise profitability and then analyzes regional heterogeneity in these factors. It finds that EPU has an inhibitory effect on the investment and profitability of enterprises, while the investment and profitability of enterprises also have an inhibitory effect on EPU. In addition, there are contribution differences and regional differences in the degrees of influence of the three factors. In the long run, EPU and the inhibition of enterprise investment and profitability are strongest in China’s central region. The results show that the stronger the certainty of economic policy, the more conducive this policy is to promoting enterprise investment behavior and improving enterprise profitability. Therefore, to ensure normal economic development, the government should limit changes in economic policy as much as possible; doing so is critical for promoting investment behavior and improving the profitability of enterprises.

scholarly journals Geopolitical-Risk and Economic Policy–Uncertainty Impacts on Tourist Flows from Neighboring Countries: A Wavelet Analysis

2021 ◽  
Vol 13 (24) ◽  
pp. 13751
Author(s):  
Alisa Kazakova ◽  
Insin Kim
Keyword(s):  
Economic Policy ◽  
South Korea ◽  
Tourism Industry ◽  
Policy Uncertainty ◽  
Tourism Demand ◽  
Economic Policy Uncertainty ◽  
China And Japan ◽  
The Impact ◽  
Wavelet Coherency ◽  
Geopolitical Risks

This paper investigates the nexus of geopolitical risks (GPRs), economic policy uncertainty (EPU), and tourist arrivals in South Korea. Specifically, this research examines whether arrivals from neighboring tourism source countries (i.e., China and Japan) are influenced by geopolitical events and economic volatilities in South Korea. To establish the research purpose, we investigated the relationships among GPRs, EPU, and tourism demand by using monthly data from January 2003 to November 2019. Additionally, innovative techniques (continuous wavelets, wavelet coherency, and wavelet phase difference) were employed, which allow the decomposition of time series considering different time and frequency components. The results demonstrate inconsistent and heterogeneous co-movements between variables that are localized across different time periods and frequencies. In addition, we detected several significant coherencies that prove the important role of GPR and EPU in explaining changes in the numbers of tourists arriving in South Korea from China and Japan. In terms of time domain, negative and positive correlations in tourism demand were detected, meaning that economic and geopolitical shocks may not always lead to negative consequences. From the frequency domain, the causal effects of GPR mostly appear to have short- to mid-run implications, with almost no relationship in the low-frequency band, whereas EPU holds a heterogeneous influence varying short-term to long-term, including higher to lower frequencies. Results show the resilience of the tourism industry against the transient effects of economic and geopolitical shocks. Tourists become adversely affected by external events such as geopolitical risks and economic uncertainties, but the impact is not consistent over time for tourists from countries neighboring Korea. The findings provide a deeper understanding of how crisis events, including political instability and economic fluctuations, can affect inbound tourism in geographically and historically interrelated countries. Therefore, to minimize the negative effect on tourism demand, it is important for practitioners to consider potential external threats when making forecasts.

scholarly journals Economic Policy Uncertainty and Enterprise Financialization under the Condition of Informationization

2021 ◽  
Vol 251 ◽  
pp. 01026
Author(s):  
Miao He
Keyword(s):  
Economic Policy ◽  
Relevant Literature ◽  
Information Age ◽  
Development Trend ◽  
Practical Significance ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
The Government ◽  
And Control ◽  
The Relationship

Information is the current global development trend, is an important force driving economic change. The incompleteness of information leads to the fluctuation of economy, which urges the government to carry on the macro-policy regulation and control, thus affects the micro-enterprise decision-making. Based on the perspective of financialization, this paper empirically tests the relationship between economic policy uncertainty and enterprise financialization under informatization, and finds that there is a significant positive correlation between them. This paper enriches the relevant literature on the uncertainty of economic policy and the financialization of enterprises under the information age, and has some practical significance for enterprises to make rational decisions when they face the uncertainty of economic policy under the information age.

Sign in / Sign up

Export Citation Format

Share Document