The spatial spillovers of terrorist attacks on tourism receipts: The case of Southeast Asia

Abstract

Tourism industry is often severely affected following terrorist attacks. This research seeks to evaluate the spatial spillover effects on tourism receipts and long-run resilience within Southeast Asia, considering both aggregate and partial regional impacts. We develop the spatial durbin model (SDM) and the dynamic spatial durbin model (DSDM) using panel data from 11 Southeast Asian countries. The findings indicate that terrorist attacks immediately and negatively influence tourism receipts in Southeast Asia through spatial spillovers. We also observe distinct spatial heterogeneities between peninsula and archipelago countries, especially regarding tourism resilience and directness of spatial spillovers. Indochina Peninsula shows no noticeable spillover effects, but Malay Archipelago exhibits a different pattern of spillovers. The long-run resilience of aggregate tourism sector is not significant, with countries on the peninsula primarily accountable for this trend. Our research provides new insights for regional stability and tourism resilience.