Abstract:

This study was undertaken to estimate the total economic impact of tourism to Malaysian economy in generating output, income, employment, and import. In order to meet the above objective, input-output model - the most widely employed model of measuring the economic impact of an event was employed. This study was carried out in an effort to fill the research gap of available literatures that measured only the direct and indirect impact of tourism utilizing partial input-output analysis for Malaysian economy. The results revealed that expenditure of inbound tourists was not only generating output, income, employment, and import of direct tourism related sectors (primary impact) but also significantly generating output, income, employment, and import impact of other productive sectors of the economy in the form secondary (indirect and induced) impact. From the results of this study, it can be concluded that when formulating policies for the expanding tourism industry, policy makers needed to be aware of adopting multiplier analysis since coefficients of multipliers differ among economic sectors. This study also suggests minimizing the variations of multipliers by adding more value of tourism products and curbing the dependency on import which, in fact, would augment the significance of multipliers of tourism related sectors over and above other closely related sectors. The study findings could be valuable to those economies optimistically promoting tourism and in quest of economic development through tourism.