THE IMPACTS OF TOURIST’S EXPENDITURES ON MALAYSIAN ECONOMY: AN INPUT-OUTPUT ANALYSIS

Abstract

This study intends to measure the impacts of tourist’s expenditures on Malaysian economy by using Input-Output (I-O), multipliers, and linkages analysis. The importance of impact is described by multipliers which are refers to the multiplier of
output, income, and employment. By knowing the multipliers, the total economic impacts generated by the tourist’s expenditures can be computed. Apart of that, the linkages analysis normally used to measure the interaction or linkage between one sector and other sectors in an economy through backward and forward linkages. The results revealed that manufacturing, and finance, insurance, real estate and business services sectors are the main contributors to the Malaysian economy output, particularly in boosting the tourism sector’s output. This study also shows manufacturing, transport, storage and communication, and finance, insurance, real estate and business services sectors as key sectors in Malaysian economy. In conclusion, since these industries showing its capability in contributing towards generating the Malaysian economy growth, the policy makers should provide the appropriate policy recommendations for future economic development strategy in tourism sector by putting more attention to the key sectors that interrelated with tourism sector.