Are Visitor Arrivals to China Stationary? An Empirical Note

The tourism industry is one of the earliest industries in China to be opened up to the world, with a more open market and relatively sufficient competition. In this article, we use the panel seemingly unrelated regressions augmented Dickey-Fuller (SURADF) tests advanced by Breuer, McNown, and Wallace [(2001). Misleading inferences from panel unit-root tests with an illustration from purchasing power parity. Review of International Economics, 9(3), 482-493] to investigate whether visitor arrivals to China are stationary for the period 1995-2010. The empirical results from numerous conventional unit root tests indicate that tourist arrivals from 18 countries studied are non-stationary; however, when Breuer et al.'s (2001) panel SURADF tests are conducted, evidence of a unit root in visitor arrivals is found in only 13 countries. From these results, one particularly important policy implication for China emerges.