The Role of Tourism and Cultural Differences in International Trade: A Case Study of Thailand

Abstract

The objectives of this study are to examine the influence of cultural similarities and differences between Thailand and its trading partners on Thailand’s tourism and international trade. The study uses secondary data from 34 countries with trade relations and inbound tourism to Thailand between 2013 and 2023, resulting in a total of 374 observations (n=374). A random effects panel regression model is employed, suitable for panel data containing time-invariant variables such as geographic distance and cultural differences. The primary independent variables include tourist arrivals and receipts, GDP per capita, geographic distances, and Hofstede’s cultural dimensions. The findings reveal that the link between tourism and international trade varies with the level of cultural distance. In countries with cultures similar to Thailand, higher tourist arrivals and receipts are positively associated with trade. Conversely, in culturally distant countries, tourism exhibits a negative relationship with trade. This underscores the importance of cultural proximity in amplifying the trade-enhancing effects of tourism. Additionally, the analysis shows that GDP and free trade agreements positively influence trade, while geographic distance has a negative impact.