Tourism Development and Financial Inclusion: The Role of Contextual Factors in Vietnam

Dinh Van Nguyen; Dao Van Le; Tuyen Quang Tran

doi:10.23762/FSO_VOL12_NO2_7

Published : 2024-06-29

Vol. 12 No. 2 (2024)

Tourism Development and Financial Inclusion: The Role of Contextual Factors in Vietnam

Dinh Van Nguyen

https://orcid.org/0000-0001-5149-1370

Dao Van Le

https://orcid.org/0000-0001-5044-0264

Tuyen Quang Tran

https://orcid.org/0000-0002-0221-1480

DOI: https://doi.org/10.23762/FSO_VOL12_NO2_7

Abstract

This study investigates the relationship between tourism development (TD) and financial inclusion (FI) in Vietnam, considering the influence of contextual factors such as domestic private sector development, education attainment, and institutional quality. The study employs a two-step generalised method of moments (GMM) estimator to address unobservable heterogeneity, simultaneity, and dynamic potential endogeneity for consistent estimation. The findings support the theoretical perspective of ecotourism and tourism-led growth, revealing that increased tourism revenue, passenger arrivals, shopping malls, and goods sales positively contribute to the FI index and its components. Notably, the study highlights the moderating role of domestic private sector development, effective institutions, and higher education levels in enhancing the nexus. Based on our findings, policy implications are drawn to foster sustainable tourism and financial inclusion. First, policymakers should prioritise supporting the growth of domestic private sector enterprises, emphasising local ownership for mutual benefits. Second, investing in education, especially in underserved areas, is essential for improving financial inclusion, as higher education levels facilitate engagement with formal financial services and reduce financial voluntary exclusion. Third, enhancing institutional quality is vital to creating a fair and transparent environment in the tourism industry, promoting responsible practices, and empowering local communities.

Keywords:

tourism development, financial inclusion, sustainability, Vietnam.

Details

References

Statistics

Authors

Download files

pdf

Citation rules

Nguyen, D. V., Le, D. V., & Tran, T. Q. (2024). Tourism Development and Financial Inclusion: The Role of Contextual Factors in Vietnam. Forum Scientiae Oeconomia, 12(2), 117–141. https://doi.org/10.23762/FSO_VOL12_NO2_7

Altmetric indicators

Cited by / Share

Licence

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

References

Arcand, J. L., Berkes, E., & Panizza, U. (2015). Too much finance? Journal of economic growth, 20, 105-148. https://doi.org/10.1007/s10887-015-9115-2

Arner, D. W., Buckley, R. P., Zetzsche, D. A., & Veidt, R. (2020). Sustainability, FinTech and financial inclusion. European Business Organization Law Review, 21, 7-35. https://doi.org/10.1007/s40804-020-00183-y

Arshad, A. (2022). Impact of financial inclusion on food security: evidence from developing countries. International Journal of Social Economics, 49(3), 336-355. https://doi.org/10.1108/IJSE-08-2021-0462

Atkinson, A., & Messy, F.-A. (2013). Promoting financial inclusion through financial education: OECD/INFE evidence, policies and practice. https://doi.org/10.1787/20797117

Balaguer, J., & Cantavella-Jorda, M. (2002). Tourism as a long-run economic growth factor: the Spanish case. Applied Economics, 34(7), 877-884. https://doi.org/10.1080/00036840110058923

Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 89, 115—143. https://doi.org/10.1016/S0304-4076(98)00009-8

Buultjens, J. W., Ratnayake, I., & Gnanapala, W. A. C. (2016). Post-Conflict tourism development in Sri Lanka: implications for building resilience. Current Issues in Tourism, 19(4), 355-372. https://doi.org/10.1080/13683500.2014.1002760

Canh, N. P., & Thanh, S. D. (2020). Domestic tourism spending and economic vulnerability. Annals of Tourism Research, 85, 103063. https://doi.org/10.1016/j.annals.2020.103063

Comerio, N., & Strozzi, F. (2019). Tourism and its economic impact: A literature review using bibliometric tools. Tourism Economics, 25(1), 109-131. https://doi.org/10.1177/1354816618793762

De Koker, L., & Jentzsch, N. (2013). Financial inclusion and financial integrity: Aligned incentives? World Development, 44, 267-280. https://doi.org/10.1016/j.worlddev.2012.11.002

Deaton, A. (2013). The Great Escape: health, wealth, and the origins of inequality. Princeton: Princeton University Press.

Demirguc-Kunt, A., Klapper, L., Singer, D., & Ansar, S. (2018). The Global Findex Database 2017: Measuring financial inclusion and the fintech revolution: World Bank Publications. http://hdl.handle.net/10986/29510

Donovan, K. (2012). Mobile money for financial inclusion. Information and Communications for development, 61(1), 61-73. https://doi.org/10.1596/9780821389911_ch04

Duval, D. T. (2004). Tourism in the Caribbean: Trends, development, prospects (Vol. 3): Routledge.

Evans, O. (2016). Determinants of financial inclusion in Africa: A dynamic panel data approach. University of Mauritius Research Journal, 22, 310-336. https://mpra.ub.uni-muenchen.de/81326/

Fan, P., Ouyang, Z., Nguyen, D. D., Nguyen, T. T. H., Park, H., & Chen, J. (2019). Urbanization, economic development, environmental and social changes in transitional economies: Vietnam after Doimoi. Landscape and Urban Planning, 187, 145-155. https://doi.org/10.1016/j.landurbplan.2018.10.014

General Statistical Office [GSO]. (2023a). General Statistical Office: Licensed foreign direct investment in 2021 by economic sector. Retrieved from https://www.gso.gov.vn/px-web-2/?pxid=V0415&theme=%C4%90%E1%BA%A7u%20t%C6%B0.

General Statistical Office [GSO]. (2023b). General Statistical Office: Percentage of high school graduates by region(*) by Region and School Year. Retrieved from https://www.gso.gov.vn/px-web-2/?pxid=V1015&theme=Gi%C3%A1o%20d%E1%BB%A5c.

Giaoutzi, M., & Nijkamp, P. (2006). Tourism and regional development: New pathways: Ashgate Publishing, Ltd.

Gopalan, S., & Khalid, U. (2022). How does financial inclusion influence tourism demand? Empirical evidence from emerging markets and developing economies. Tourism Recreation Research, 1-15. https://doi.org/10.1080/02508281.2022.2028084

Hall, C. M., & Lew, A. A. (2009). Understanding and managing tourism impacts: An integrated approach: Routledge.

Honohan, P. (2008). Cross-country variation in household access to financial services. Journal of Banking & Finance, 32(11), 2493-2500. https://doi.org/10.1016/j.jbankfin.2008.05.004

Jiang, Y., Tian, G., Wu, Y., & Mo, B. (2022). Impacts of geopolitical risks and economic policy uncertainty on Chinese tourism‐listed company stock. International Journal of Finance & Economics, 27(1), 320-333. https://doi.org/10.1002/ijfe.2155

Karpowicz, I. (2016). Financial inclusion, growth and inequality: a model application to Colombia. Journal of Banking and Financial Economics, 6(2), 68-89. https://doi.org/10.7172/2353-6845.jbfe.2016.2.4

Kumar, R. R. (2014). Exploring the role of technology, tourism and financial development: an empirical study of Vietnam. Quality & Quantity, 48(5), 2881-2898. https://doi.org/10.1007/s11135-013-9930-5

Kusluvan, S., Kusluvan, Z., Ilhan, I., & Buyruk, L. (2010). The human dimension: A review of human resources management issues in the tourism and hospitality industry. Cornell Hospitality Quarterly, 51(2), 171-214. https://doi.org/10.1177/1938965510362871

Lal, A., Lockhart, M., Xu, Y., & Zu, Z. (2023). How much should we trust instrumental variable estimates in political science? Practical advice based on over 60 replicated studies. arXiv preprint arXiv:2303.11399. https://doi.org/10.48550/arXiv.2303.11399

Le, D. V., & Tran, T. Q. (2023). Heterogenous effects of ICT application on local tourism development: a quantile regression approach. Journal of Policy Research in Tourism, Leisure and Events, 1-23. https://doi.org/10.1080/19407963.2023.2196727

Liu, Z. (2003). Sustainable tourism development: A critique. Journal of Sustainable Tourism, 11(6), 459-475. https://doi.org/10.1080/09669580308667216

Manyara, G., & Jones, E. (2007). Community-based tourism enterprises development in Kenya: An exploration of their potential as avenues of poverty reduction. Journal of Sustainable Tourism, 15(6), 628-644. https://doi.org/10.2167/jost723.0

Nawaz, T. (2022). What’s in an education? Implications of CEO education for financial inclusion. International Journal of Finance & Economics, 27(3), 3741-3753. https://doi.org/10.1002/ijfe.2348

Nguyen, C. P., Schinckus, C., Su, T. D., & Chong, F. H. L. (2021). The influence of tourism on income inequality. Journal of Travel Research, 60(7), 1426-1444. https://doi.org/10.1177/0047287520954538

Ohlan, R. (2017). The relationship between tourism, financial development and economic growth in India. Future Business Journal, 3(1), 9-22. https://doi.org/10.1016/j.fbj.2017.01.003

Patten, M. L. (2016). Understanding research methods: An overview of the essentials: Routledge.

Paul, S., & Bhattacharya, R. N. (2004). Causality between energy consumption and economic growth in India: a note on conflicting results. Energy Economics, 26(6), 977-983. https://doi.org/10.1016/j.eneco.2004.07.002

Podhorodecka, K. (2018). Tourism economies and islands’ resilience to the global financial crisis. Island Studies Journal, 13(2). https://doi.org/10.24043/isj.43

Putzeys, R. (2002). Micro finance in Vietnam: Three case studies. Rural Project Development, Hanoi. https://www.findevgateway.org/case-study/2002/05/microfinance-vietnam-three-case-studies

Ridderstaat, J., Fu, X., & Lin, B. (2022). A framework for understanding the nexus between tourism development and poverty: Application to Honduras. Tourism management, 93, 104620. https://doi.org/10.1016/j.tourman.2022.104620

Roodman, D. (2009). How to do xtabond2: An introduction to difference and system GMM in Stata. The stata journal, 9(1), 86-136. https://doi.org/10.1177/1536867X0900900106

Ross, S., & Wall, G. (1999). Ecotourism: towards congruence between theory and practice. Tourism management, 20(1), 123-132. https://doi.org/10.1016/S0261-5177(98)00098-3

Sanderson, A., Mutandwa, L., & Le Roux, P. (2018). A review of determinants of financial inclusion. International Journal of economics and financial issues, 8(3), 1-8. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/5458

Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613-628. https://doi.org/10.1186/s13731-021-00190-4

Scheyvens, R. (1999). Ecotourism and the empowerment of local communities. Tourism management, 20(2), 245-249. https://doi.org/10.1016/S0261-5177(98)00069-7

Shahbaz, M., Kumar, R. R., Ivanov, S., & Loganathan, N. (2017). The nexus between tourism demand and output per capita with the relative importance of trade openness and financial development: A study of Malaysia. Tourism Economics, 23(1), 168-186. https://doi.org/10.5367/te.2015.0505

Shi, Y., Swamy, V., & Paramati, S. R. (2021). Does financial inclusion promote tourism development in advanced and emerging economies? Applied Economics Letters, 28(6), 451-458. https://doi.org/10.1080/13504851.2020.1761521

Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. Festschrift in honor of Peter Schmidt: Econometric methods and applications, 281-314. https://doi.org/10.1007/978-1-4899-8008-3_9

Siddik, M. N. A. (2017). Does financial inclusion promote women empowerment? Evidence from Bangladesh. Applied Economics and Finance, 4(4), 169-177. https://doi.org/10.11114/aef.v4i4.2514

Soumare, I., Tchana Tchana, F., & Kengne, T. M. (2016). Analysis of the determinants of financial inclusion in Central and West Africa. Transnational Corporations Review, 8(4), 231-249. https://doi.org/10.1080/19186444.2016.1265763

Stone, L. S., & Stone, T. M. (2011). Community-based tourism enterprises: challenges and prospects for community participation; Khama Rhino Sanctuary Trust, Botswana. Journal of Sustainable Tourism, 19(1), 97-114. https://doi.org/10.1080/09669582.2010.508527

Tran, T. Q., & Dinh, V. T. T. (2021). Provincial governance and financial inclusion: micro evidence from rural Vietnam. International public management journal, 24(6), 792-812. https://doi.org/10.1080/10967494.2021.1964009

Tu-Anh, V.-T., & Perkins, D. H. (2021). Explaining Vietnam’s Economic Growth Experience. book chapter in Dwight Perkins and Börje Ljunggren (eds). Vietnam: State, Economy, Society in a Shifting Global Environment (forthcoming).

Tugcu, C. T. (2014). Tourism and economic growth nexus revisited: A panel causality analysis for the case of the Mediterranean Region. Tourism management, 42, 207-212. https://doi.org/10.1016/j.tourman.2013.12.007

Uddin, A., Chowdhury, M. A. F., & Islam, M. N. (2017). Determinants of financial inclusion in Bangladesh: Dynamic GMM & quantile regression approach. The Journal of Developing Areas, 51(2), 221-237. https://doi.org/10.1353/jda.2017.0041

Van Le, D., & Tran, T. Q. (2022). Does the private sector increase inequality? Evidence from a transitional country. Structural Change and Economic Dynamics, 62, 451-466. https://doi.org/10.1016/j.strueco.2022.06.005

Van Le, D., Tran, T. Q., & Doan, T. (2022). The private sector and multidimensional poverty reduction in Vietnam: A cross‐province panel data analysis. International Journal of Social Welfare, 31(3), 291-309. https://doi.org/10.1111/ijsw.12524

Wintoki, M. B., Linck, J. S., & Netter, J. M. (2012). Endogeneity and the dynamics of internal corporate governance. Journal of Financial Economics, 105(3), 581-606. https://doi.org/10.1016/j.jfineco.2012.03.005

Xu, S., Asiedu, M., & Effah, N. A. A. (2022). Inclusive finance, gender inequality, and sustainable economic growth in Africa. Journal of the Knowledge Economy, 1-37. https://doi.org/10.1007/s13132-022-01036-4

Zins, A., & Weill, L. (2016). The determinants of financial inclusion in Africa. Review of development finance, 6(1), 46-57. https://doi.org/10.1016/j.rdf.2016.05.001