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In the context of Macau’s economy, which is driven primarily by gaming and tourism, this paper aims to explore the interrelationship between Macau's Gross Domestic Product (GDP) and tourist expenditure (TE) over the period 2010 to 2023. Utilizing co-integration analysis, error correction modeling (ECM), and vector autoregression (VAR), this paper examines the long-term and dynamic interactions between GDP and TE, meanwhile incorporating data spanning pre-pandemic and pandemic periods to capture a comprehensive view. The findings confirm a cointegration relationship between GDP and TE, with GDP identified as a Granger cause of tourist expenditure. And the ECM indicates that the short-term deviation is quickly corrected, demonstrating a stable adjustment mechanism. During the economic instabilities triggered by the COVID-19 pandemic, the influence of TE on GDP became more significant, underscoring the correlation of these variables during periods of economic shock. The robust relationship between GDP and TE suggests that Macau’s economic strategy could focus more on enhancing and diversifying its tourism sector to promote long-run economic growth and enhance economic resilience.

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Unveiling Macau’s Tourism-Economy Connection: Co-integration and VAR Model Analysis

  • 会议论文

  • 发表日期：

    2025年

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  • Yanyou Song

摘要

In the context of Macau’s economy, which is driven primarily by gaming and tourism, this paper aims to explore the interrelationship between Macau's Gross Domestic Product (GDP) and tourist expenditure (TE) over the period 2010 to 2023. Utilizing co-integration analysis, error correction modeling (ECM), and vector autoregression (VAR), this paper examines the long-term and dynamic interactions between GDP and TE, meanwhile incorporating data spanning pre-pandemic and pandemic periods to capture a comprehensive view. The findings confirm a cointegration relationship between GDP and TE, with GDP identified as a Granger cause of tourist expenditure. And the ECM indicates that the short-term deviation is quickly corrected, demonstrating a stable adjustment mechanism. During the economic instabilities triggered by the COVID-19 pandemic, the influence of TE on GDP became more significant, underscoring the correlation of these variables during periods of economic shock. The robust relationship between GDP and TE suggests that Macau’s economic strategy could focus more on enhancing and diversifying its tourism sector to promote long-run economic growth and enhance economic resilience.