Heterogeneous effects of visa exemption policy on international tourist arrivals: Evidence from Indonesia

Muhammad Halley Yudhistira, Yusuf Sofiyandi, Witri Indriyani, Andhika Putra Pratama

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

We examined the potential heterogeneous impact of implementing a series of visa exemption policies on foreign tourist arrivals in Indonesia by exploiting a rich data set of monthly series of foreign tourist arrivals, by country and by port of entry between January 2014 and December 2018. This is the first study in providing empirical evidence of the heterogeneous impact of a country’s visa exemption policy across tourist’s origins and within-country destinations. Using a panel data approach, our estimates showed that while the policy increased monthly foreign tourist arrivals by 5% on average, the effect was evident for less-traditional destinations only. The policy also potentially provided a diversion effect between destinations, such that it created an adverse effect on the traditional destinations of Indonesia. Our estimates also suggest a heterogeneous impact between origins at the continent level, and an 8% higher impact per year after the policy’s introduction, which was relatively lower than has been found in other studies. The findings imply that the visa exemption policy is not a one-size-fits-all policy in attracting international tourist arrivals.

Original languageEnglish
Pages (from-to)703-720
Number of pages18
JournalTourism Economics
Volume27
Issue number4
DOIs
Publication statusPublished - Jun 2021

Keywords

  • foreign tourist arrivals
  • Indonesia
  • panel
  • visa exemption

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