Determinants of Chinese tourism demand to South Korea

다국어 초록 (Multilingual Abstract)

With the rapid growth of international tourism demand, Chinese tourism demand to South Korea has been a hot issue recently. In addition, the tourism industry can be regarded as one of the most important sectors in Korea's current economic development. Therefore, the primary purpose of this paper is to identify the main determinants of Chinese tourist demand to South Korea over the period covering 1984-2014 by employing co-integration techniques and error correction model.
The empirical results indicate that the estimated coefficient of lagged variable is significant and may reflect the importance of word of mouth in determining Chinese tourist demand. The study also clearly shows that income, trade, and relative price are main determinants of Chinese tourism demand to South Korea. The study reveals that Chinese income can be viewed as luxury goods because its elasticity is greater than unity. On the contrary, Chinese tourists' reaction to a change in the relative price turns out to be price elastic by decreasing their tourism demand. Therefore, to attract more Chinese tourists to South Korea, adequate marketing policies should be established based on the findings of this study.

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