DO FINANCIAL DEVELOPMENT AND DIGITAL INFRASTRUCTURE FOSTER TOURISM PERFORMANCE IN ASEAN COUNTRIES?
Keywords:
Tourism Performance; Digital Infrastructure; Financial Development; ASEAN; Panel Data AnalysisAbstract
This study examines whether financial development and digital infrastructure foster tourism performance in ASEAN countries. Despite the growing literature on tourism development, limited studies jointly analyze the roles of financial systems and digital infrastructure in shaping tourism outcomes in developing regions. Using panel data for selected ASEAN economies covering the period 2005–2024, tourism performance is proxied by international tourism revenues, while financial development indicators, digital infrastructure variables, and macroeconomic fundamentals are incorporated as explanatory factors. The empirical analysis employs panel data econometric techniques, including pooled regression, fixed effects, and random effects models, to account for unobserved country-specific heterogeneity. The Hausman specification test is applied to determine the appropriate model, and robust standard errors are used to address potential heteroskedasticity. In addition, marginal effects are estimated to evaluate the economic significance of key variables influencing tourism revenues. The results indicate that digital infrastructure, particularly fixed broadband penetration, has a positive and statistically significant effect on tourism revenues, highlighting the importance of digital connectivity in facilitating tourism services and market access. In contrast, traditional financial development indicators, such as market capitalization and domestic credit, show weaker and less consistent effects once country-specific heterogeneity is controlled for. Economic development emerges as a strong driver of tourism performance, while the COVID-19 dummy variable confirms a significant negative shock to tourism activity during the pandemic period. Overall, the findings suggest that tourism performance in ASEAN countries is more strongly associated with improvements in digital infrastructure and economic development than with financial deepening alone.References
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