Do Tourism and Institutional Quality Asymmetrically Effects on FDI Sustainability in BIMSTEC Countries: An Application of ARDL, CS-ARDL, NARDL, and Asymmetric Causality Test

The motivation of the study is to investigate the nature of the relationship between institutional quality, tourism, and FDI in BIMSTEC nations for the period 1996Q1-2018Q4. Exploring their nature of association, the study performed several panel econometric models, namely Panel ARDL, Nonlinear ARDL, and Toda-Yamamoto causality test, with symmetric and asymmetric effects of institutional quality and tourism. The results of the Wald test confirmed the long-run asymmetric relationship between institutional quality, tourism, and FDI, both in the long-run and short-run. Furthermore, directional casualty established a feedback hypothesis explaining the relationship between institutional quality, tourism, and FDI.

Automated summary

The study investigated the relationship between institutional quality, tourism, and FDI in BIMSTEC nations from 1996Q1 to 2018Q4. The research found a long-term asymmetric relationship among institutional quality, tourism, and FDI, and established a feedback hypothesis to explain the relationship between them.