Globalization, Country Risks, and Trade in Tourism Services: Evidence from China

This study applies the autoregressive distributed lag (ARDL) model to examine the impacts of globalization and country risks on China's tourism service trade over the period 1984-2015. The results reveal that in the long run, globalization has a significant negative impact on tourism service exports and tourism service trade balances, while a significant positive impact on tourism service imports. In the short run, globalization has a significant negative impact on tourism service imports, while a significant positive impact on tourism service exports and trade balances. Country stability could roughly mitigate these negative and positive impacts of globalization on tourism service trade in both the short and long run. Moreover, the speed of adjustment from the short run to long run equilibrium path is relatively fast. These results are important for China's policy makers when formulating a strategy for the development of tourism service trade.