Dynamic linkage between innovations, tourism, and trade openness on economic stabilization. Evidence from East-Asia pacific countries

Abstract

This manuscript's primary goal was to empirically analyze the dynamic interrelation among tourism, innovations and trade openness on economic stability using panel data spanning the years 2000-2023 in the context of eight East Asia Pacific countries. The panel data, which was created using the WDI. The gathered data was analyzed using the panel unit root test, PMG/ARDL, and further diagnostic tests. When, innovation, tourism, and trade openness work together they create a powerful cycle of economic growth. In the econometric equation, the dependent variable was economic growth, the independent variables were innovations, tourism, and trade openness, and the control variable was inflation. Immediate effects exist for nearly all variables, with particularly strong impacts from tourism and trade and the interaction between modifier as innovations and human capital (R&D and HC1). The relation between R&D and human capital enhances growth outcomes more effectively than R&D alone. The study conveys that the region's innovations, tourism, and trade revenues boost GDP. Therefore, any expansion in the East Asia Pacific region's trade, tourism, and innovation sectors boosts the region's economic growth.