Is the domestic tourism cycle synchronized with the economic cycle? Evidence from Mainland China and Taiwan

This study describes the linkage relationships between the economic cycle and the domestic tourism cycle in Mainland China and Taiwan. The Markov-switching vector autoregressive (MS-VAR) model is used to test the relationship between periodic variables. The results show that the domestic tourism cycle and the economic cycle of Mainland China have a reverse fluctuating trend and that in Taiwan, the domestic tourism cycle is synchronized with the economic cycle. Results support that the linkage relationships between the economic cycle and the domestic tourism cycle are different in two economies which has fundamental difference in the development stage and economic institutions.