Dynamic relationship between air transport, economic growth and inbound tourism in Cambodia, Laos, Myanmar and Vietnam

Abstract

Cambodia, Laos, Myanmar and Vietnam (the CLMV countries) in Mainland Southeast Asia share a similar history in their political systems, development of their aviation industries and their economic development in general. This study examines the relationship between air transport development, economic growth and inbound tourism in the CLMV countries. There is bi-directional causality between air passenger traffic and economic growth in the long run. Inbound tourism has a significant impact on air transport demand in the long run but no significant relationship exists between the two in the short run. Air transport deregulation had a positive and significant impact on traffic volumes, particularly for Cambodia. Further reforms are still needed before such an outcome can occur in Myanmar.