Medical Tourism and Its Implication on Malaysia's Economic Growth
Tang, Chor Foon
O11 - Macroeconomic Analyses of Economic Development | Economic growth; Malaysia; Medical tourism | C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models
Policymakers in the developed and developing countries already heading toward medical tourism to stimulate economic growth. Nonetheless, the actual impact of medical tourism on economic growth remains ambiguous. Although medical tourism may spur economic growth via its impact on foreign currency earnings, investments, tax revenue, and employment opportunities, it may also leave numerous negative externalities that either direct or indirectly harmful the process of economic growth. Undeniably, the effectiveness of relying on medical tourism to ignite long-term economic growth is remains as a vital research question. Therefore, this study attempts to address the question by assessing the effectiveness of medical tourism in stimulating long-term Malaysia’s economic growth through a well-established neoclassical growth model and a set of advanced time series econometric approaches. The key findings of this study are that medical tourism has significant positive impact on Malaysia’s economic growth in the long-run. Furthermore, we find that medical tourism Granger-cause economic growth and it is also relatively the most important factor in explaining the variation of Malaysia’s economic growth, especially in the long-run.