Tourism-induced income distribution in Malaysia: a practical experience of a truly Asian economy

This paper investigates the impact of tourism on income distribution by applying income inequality function for the Malaysian economy. The study period is 1991q1 to 2017q4. The Zivot and Andrews unit root test accommodating single unknown structural break in the series is applied to test the unit root properties of the variables. The cointegration between the variables is examined by using the Bayer–Hanck combined approach, and bounds testing approach to cointegration is applied to test the robustness of cointegration results. We find that the variables are cointegrated for a long-run relationship. Tourism (tourist arrivals, tourist receipts) improves income distribution by lowering income inequality. Economic growth is positively linked with income inequality. Trade openness declines income inequality. The causality results indicate the unidirectional causality running from tourism to income distribution.