Moderation analysis of exchange rate, tourism and economic growth in Asia (2024)

2.1 Tourism and economic growth

This section discusses the literature on tourism economics focusing on economic growth and tourism nexus. From a theoretical perspective, Lanza and Pigliaru [27] were among the first to document the tourism-growth nexus. They find that countries with high tourism sectors experienced high economic growth. They developed a Lucas type-two sector model where tourism is taken as one of the sectors which depends on the endowments of natural resources such that countries with abundant natural resources have high growth potential and achieve a faster rate of growth. Perles-Ribes et al. [28] studied the tourism and economic growth nexus using autoregressive distributed lag (ARDL) and Toda-Yamamoto model for the period 1957 to 2014 taking into consideration the economic crises. Their findings revealed a bi-directional relationship between economic growth and tourism development. There are many studies proposing the hypothesis that growth of tourism in the country is directly linked to economic prosperity [29]. The study reports that there is bidirectional causality between tourism and economic growth. Fuinhas et al. [22] report that in the long run, high frequency of tourist arrivals in the country leads to positive economic growth. In another study, Naseem [30] concludes that in the long run, tourism receipts, number of tourist arrivals, and total expenditure have a strong positive relationship with economic growth. The study empirically examined the data from Saudi Arabia and validated the popular hypothesis that tourism leads to economic growth in the country. Similar findings were obtained by [31–35], where they concluded that tourism has a positive impact on the economic growth of the country. The study by Sahni et al. [36] used a quantile regression approach and concluded that tourism growth has a more pronounced effect on economic growth below the threshold and above the threshold. The study further concluded that countries with lower economic growth have more benefits from tourism development. The study by Selvanathan et al. [37], applied ARDL, vector error correction model (VECM) and panel frameworks and concluded that in the long run tourism development positively contributes to growth. Tourism development is the significant predictor of the economic growth and financial development at frequency rather than the low frequency [38]. On the contrary, Croes et al. [39], revealed that tourism development has a very short term effect on economic development and a negative and indirect link to human development. Similar findings were obtained by Kyara et al. [23] where it was revealed that there is a unidirectional causality relationship between tourism development and economic growth.

2.2 Tourism and exchange rate

The effects of exchange rate on tourism development can differ across the country, territory and within the tourism jurisdiction [38]. The real and nominal appreciation of the currency leads to a negative impact on the tourism development in the country [40]. Exchange rate has asymmetric impact on tourism on tourism development in developing countries such as, India, Bangladesh, Pakistan and Nepal in the short run [41]. Boskurt et al. [42] applied dynamic common correlated effects (DCCE) approach in their study on demand and exchange rate shocks on tourism development and concluded that effects of the exchange rate shocks are temporary on the tourism development. To examine the response of tourism demand to exchange rate fluctuation in South Korea, Chi [43] used ARDL model and concluded that tourists are sensitive to the appreciation of the Korean Won, whereas they are insensitive to its depreciation. The findings of the study imply that foreign visitors in Korea are loss averse and with increase or decrease in the exchange rate volatility tend to affect the tourism demand in an asymmetric manner. Dogru et al. [44] used ARDL approach to examine the trade balance and exchange rate taking evidence from tourism development. The study concluded that depreciation and appreciation of the US Dollar affects the bilateral tourism with Canada, Mexico, and the United Kingdom (UK). The study further concluded that in the long-run the appreciation of the US dollar negatively affects the tourism trade balance with Canada and the UK while it does not affect the tourism development with Mexico in the long-run. A study by Belloumi [45], examined tourism receipts and exchange rate nexus in Tunisia and concluded that there is a cointegrating relationship between tourism and economic growth. An increase in foreign direct investment (FDI) and appreciation of the exchange rate contracts the tourism demand of the country while in the long-run the depreciation of domestic currency and decrease in FDI inflow results in more tourist inflow [41]. Similar findings were obtained by [46] and [47] where they revealed that reduction in FDI inflow and depreciation of foreign exchange rate results in positive tourism development.

2.3 Tourism, exchange rate and economic growth

There are few studies that investigated the nexus of exchange rate, tourism development and economic growth [23, 48, 49]. Primayesa et al. [50] probed the dynamic relationship among real exchange rate, economic growth and tourism development in Indonesia using variance decomposition and impulse response function approach. The study revealed that in explaining the tourism shock in Indonesia, the real exchange rate is less important than the economic growth. The study further concluded that the shock of economic growth and real exchange rate has a positive effect on tourism activity in the short- and long-term. Harvey et al. [25] applied bounds testing approach to cointegration and error-correction modelling to examine whether tourism development and exchange rate promote the economic growth in Brunei Darussalam, Indonesia, Malaysia, and the Philippines. The study revealed the Philippines is the only country that has the positive long-run and short-run impact from the tourism industry and exchange rate.

3.1 Dependent variable

Real GDP per capita is the proxy for economic growth. Studies on tourism-growth nexus have widely used it [51–53] likewise, those on exchange rate-growth relationship [54, 55].

3.2 Main explanatory variables

From World Development Indicators, International tourism, receipts (% of total exports) is defined as: expenditures by inbound visitors including payments to foreign carriers for international transport. In other words, this composite variable captures the spendings of inbound tourists to Asia and the Pacific, among others. In line with the literature [56–60], tourism receipts which is the first main explanatory variable is proxied by tourism receipts in current US dollars. Existing literature have found a positive relationship between different dimensions of tourism and economic growth [61–65]. The second key explanatory variable is exchange rate [42, 66–68]. The exchange rate captures the competitiveness of a country in the international market [69–73]. Lastly, to address the study questions, an interaction term of tourism receipts with exchange rate (TRPT*XR) is included to determine if exchange rate moderates the impact of tourism on growth.

3.3 Control variables

The set of control variables align with those used in growth models: mobile phone subscription [5, 74, 75], individuals using the Internet [76, 77], labour force participation [78] (Niebel, 2018), foreign direct investment net inflows [79], domestic credit to the private sector [80–83] and services trade [84, 85]. We expect positive coefficients in line with existing literature. Table 1 details the variables used.

3.4 Empirical model

We specify two baseline linear models that expresses economic growth as a function of tourism receipts, exchange rate and a set of control variables which satisfies the first objective:

Where, lnPC_it = natural logarithm of per capita GDP; lnTRPT_it = natural logarithm of tourism receipts; XR_it = official exchange rate; Z′_it and K′_it = vector of control variables in natural logarithms; α_i, γ_i = parameters to be estimated; φ_t, δ_t = year dummies (which controls for common shocks such as the global financial crises of 2007–2009), and u_it, e_it = general error term. To satisfy the second objective, we add an interaction term (TRPT*XR) to Eq [1] and the model becomes:

Where, R′_it = vector of control variables in natural logarithms; η_i = parameters to be estimated; ω_t = year dummies (which controls for common shocks such as the global financial crises of 2007–2009), and v_it = general error term. From Eq [3], η₃ provides two information. First, the sign of the coefficient indicates if exchange rate exerts a significant moderation effect on economic growth. That is, whether the interaction of both variables intensifies or hinders growth. Secondly, the magnitude of the coefficient may sustain or sway the impact of tourism on growth which is derived as:

3.5 Estimation techniques and strategy

Specifically, our econometric strategy consists of a three-step procedure. First, we examine linear impact of tourism on economic growth. Next, we estimate the linear effect of exchange rate on economic growth. Lastly, we perform the moderation analysis to show the interaction effect on economic growth. We engage these analyses using two techniques: the instrumental variables-two-step generalised method of moments (IV-GMM) techniques and the quantile estimator [14–16]. Specifically, the IV-GMM technique is used to correct for cross-sectional dependence, endogeneity, autocorrelation and heteroscedasticity in the data [11, 87]. It uniquely deploys the ivreg2 routine in Stata version 16 developed by Baum, Schaffer, and Stillman [12, 13]. The routine performs several variants of single-equation linear regression models including the generalized method of moments (GMM). Hence, the GMM variant which implements the two-step feasible GMM estimation (that is, gmm2s option) is adopted to ensure that our results are devoid of endogeneity, heteroscedasticity and autocorrelation [12]. On the other hand, the quantile regression is deployed to examine the potentially differential effects of tourism and exchange rate at different levels of growth. The quantile regression model is a defined solution to minimize the equation for the θth regression quantile, 0< θ<1 and expressed thus:

Where, y_t is the dependent variable and x_t is a k x 1 vector of explanatory variables.

4.1 Summary statistics and correlation analysis

The upper panel of Table 2 contains the correlation matrix’s results, illustrating the relationship between the regressors and the outcome variables. Our findings indicate a negative correlation between per capita GDP and official exchange rate, implying that rising income will decrease the exchange rates in Asia. Likewise, individuals use the internet and the official exchange rate. Trade in services is negatively associated with tourism receipts, official exchange rate, FDI, and MOB. These findings suggest that increasing individuals using the internet and trade in services will impact the official exchange rate, tourism receipts, FDI, and MOB.

The lower panel of Table 2 indicates the summary statistics for the variables from 2010 to 2019. The average of per capita GDP, tourism receipts, official exchange rate, domestic credit to the private sector, labour force participation, foreign direct investment, mobile phone subscriptions, internet users, and trade in services are 12398.47, 9080000, 1295.02, 71.42, 69.06, 1540000, 92490468, 38.86, and 30.269, respectively, from the entire sample. At the same time, the standard deviation provides information on the deviation from sample averages.

4.2 IV-GMM results

Table 3 displays results for the instrumental variables-two-step generalised method of moments (IV-GMM). Across the Full, EAP, and SA samples, tourism receipts and exchange rate are instrumented with their first difference and level terms. Limiting to the variables of interest, the summary of the linear models from the full sample shows tourism receipts as a significant positive predictor of economic growth. The findings indicate that a percentage change leads to 0.88% rise in economic growth, on average, ceteris paribus. We argue that a well-structured tourist sector together with investments in modern infrastructure will boost growth supporting Tugcu [88], Alfaro [89], Calero and Turner [90], Cheng and Zhang [91], and Scarlett [92] all of which argue in favour of tourism-driven growth. The exchange rate shows a significant negative effect on growth. According to the findings, a percentage-point change in the exchange rate results in a 0.00005% drop in economic growth. The reason for this is not far-fetched. Exchange rate fluctuations influence potential travellers’ decisions to alter their destination or shorten their vacation resulting in revenue loss for economies. This may result in adjustments to visitors’ travel plans while in a particular nation [93]. These findings corroborate those of Lin, Liu, and Song [94], Meo et al. [95], Sharma and Pal [96], Chi [43], and Seraj and Coskuner [97]. For EAP countries, tourism increases economic growth by 0.62%, on average, ceteris paribus. On the other hand, the coefficient of the exchange rate is negative and significant at 1 per cent, which supports the argument of Vieira et al. [98] and Seraj and Coskuner [97]. These studies contend that local currency appreciation will decrease the spending power of international tourists with consequent decline on tourism demand and economic growth. In South Asia, the effect of tourism on growth is positive but statistically not significant but exchange rate significantly boosts growth by 0.007%, on average, ceteris paribus. This finding contradicts Seraj and Coskuner [97] and suggests that currency appreciation is growth-enhancing. For the moderation models, columns [3, 6, 9] reveal that the interaction effect is positive but statistically not different from zero for the full and EAP samples while it decreases growth in South Asia which contradicts Sharma, Vashishat, and Rishad [99]. In other words, the conditional effect of tourism on growth reduces when exchange rate appreciates in South Asia.

On the reliability of the instruments used to validate the robustness of our estimations, we controlled for identification and exclusion restrictions which are indispensable for robust GMM estimations [12, 13]. Having used the IV-GMM estimation in ivreg2, the appropriate test of overidentifying restrictions and testing the validity of instruments used is the Hansen J statistic: the GMM criterion function. From the lower panel of Table 3, the p-value of the Hansen-J statistic across the six models ranges between 0.085 and 0.3874 which is clearly above 0.05. Hence, it fails to reject the null hypothesis of instruments validity indicating that the instruments used are valid and robust to our analysis.

4.3 Quantile regression results

Table 4 presents the quantile regression results across the 25th, 50th, and 75th quantiles of economic growth. The topmost panel displays the full sample results where tourism significantly improves growth at the 25^th and 50^th quantiles by 0.23% and 0.12%, respectively. Noticeably, the positive effect of tourism receipts declines along the distribution. On the other hand, exchange rate appreciation shows a reducing effect on growth at the 25^th and 50^th quantiles by -0.000051% and -0.000059%, respectively. This reducing effect is larger at the 50^th quantile indicating that economic growth vulnerable to exchange rate fluctuations. Following our findings, we hypothesise that variations in the official exchange rate affects tourist purchasing decisions and economic growth in the long-run [100]. On the interaction effect, we find no significant impact on growth corroborating the results shown in Table 3.

The results of East Asia and the Pacific displayed in the middle panel indicate that tourism significantly increases growth at the 25^th and 50^th quantiles by 0.44% and 0.31%, respectively. A reducing positive effect is observed similar to that of the full sample. Also, exchange rate appreciation shows a reducing effect on growth at the 25^th and 50^th quantiles by -0.000061% and -0.000067%, respectively. Similar to the full sample, this reducing effect is larger at the 50^th quantile and we find no significant interaction effect on growth. From the lowest panel, the results from South Asia indicate that tourism significantly increases growth at the 50^th and 7^th quantiles by 0.17% and 0.19%, respectively. An increasing positive effect is observed contrary to the full and EAP samples. Likewise, exchange rate appreciation increases economic growth across all the quantiles, though with a declining trend from 0.0087% to 0.0075%. Contrary to the full and EAP samples, a significant negative interaction effect is observed across the quantiles supporting the results shown in Table 3.

S1 Data

(XLSX)

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30 Aug 2022

PONE-D-22-18174Moderation analysis of exchange rate, tourism and economic growth in AsiaPLOS ONE

Dear Dr. Adeleye,

Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands.

In view of the referees’ feedback and my own reading of your paper, we believe your paper is some way from being publishable. In particular, there are serious doubts about the underlying hypotheses on which the research is based, as well as about the methodology used.

While we consider the issues identified to be major in nature, we are willing to offer you a chance to rework the paper if you feel able to address them fully and robustly. Therefore, we invite you to submit a revised version of the manuscript that addresses the points raised during the review process.

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J E. Trinidad Segovia

Section Editor

PLOS ONE

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Comments to the Author

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The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #1:Yes

Reviewer #2:Yes

Reviewer #3:Partly

**********

2. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #1:Yes

Reviewer #2:N/A

Reviewer #3:I Don't Know

**********

3. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #1:Yes

Reviewer #2:Yes

Reviewer #3:No

**********

4. Is the manuscript presented in an intelligible fashion and written in standard English?

PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here.

Reviewer #1:No

Reviewer #2:Yes

Reviewer #3:Yes

**********

5. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #1:Idea of the paper and statistical parts have been performed appropriately and rigorously. And there is no problem. But some formal parts have mistakes and errors. Some of them:

1- Abstract part should be improved.

2- Too many references. Can be reduced according to the journal index (Scopus, Sci, ssci etc.)

3- No need to citations in Data and Methodology parts. They must be in Literature Review part.

4- In text there are citation errors. For example more than 3 authors use et al. Some parts it is true but some parts wrong.

5- Some citations are missed in references especially in page 12.

6- Use "literature review" instead of "Review of literature".

7- At conclusion part comparisons with previous studies can be made.

Reviewer #2:The paper attempts to examine “moderation analysis of exchange rate, tourism and economic growth in Asia”. After reviewing, I find that this paper is interesting. The paper is readable ragarding the case of economic growth in Asian in the background of exchange rate, tourism and their interactive association.

See the attachment

Reviewer #3:The paper under consideration looks at the impact of tourism on GDP growth and the interactions of the impact with exchange rate. In my opinion this paper has important shortcomings that will prevent it from being published in the current form. My suggestion is rejection. The issues that lead to my decision are as follows:

1. The paper largely ignores the growth regression literature and certainly aims to be a part of it.

2. The value added generated in the tourism sector is in fact part of the overall value added of the economy. This is largely correlated with the international tourism. What sense does it have to regress GDP on a component of it? We can find out quite precisely what is the EXACT contribution of tourism to GDP and GDP growth.

3. The models are estimated by GMM. However, what are the instruments? The paper does not seems to use any sort of Arellano-Bond, Arellano Bower System-GMM. So the description is vague. And in particular, the panel System-GMM methods are mainly used to solve the endogeneity caused by the lagged dependent variable and not the inherent endogeneity of the economic problem posed here. So this part clearly needs clarification and justification. It does not suffice to write that „results are devoid of endogeneity, heteroscedasticity and autocorrelation.”

4. The measurement of both TRPT and GDP in USD should be discussed, i.e., the volume of tourist services may be positively related to depreciating exchange rate but its value in USD may not.

5. To what extend this is a different problem than analysis of any export-oriented sector? Why do we care?

6. How about controlling for real exchange rate, standard in BOP and competitiveness-related studies.

**********

6. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files.

If you choose “no”, your identity will remain anonymous but your review may still be made public.

Do you want your identity to be public for this peer review? For information about this choice, including consent withdrawal, please see our Privacy Policy.

Reviewer #1:Yes:Volkan Dayan

Reviewer #2:No

Reviewer #3:No

**********

[NOTE: If reviewer comments were submitted as an attachment file, they will be attached to this email and accessible via the submission site. Please log into your account, locate the manuscript record, and check for the action link "View Attachments". If this link does not appear, there are no attachment files.]

While revising your submission, please upload your figure files to the Preflight Analysis and Conversion Engine (PACE) digital diagnostic tool,https://pacev2.apexcovantage.com/. PACE helps ensure that figures meet PLOS requirements. To use PACE, you must first register as a user. Registration is free. Then, login and navigate to the UPLOAD tab, where you will find detailed instructions on how to use the tool. If you encounter any issues or have any questions when using PACE, please email PLOS atgro.solp@serugif. Please note that Supporting Information files do not need this step.

7 Oct 2022

Dear Editor,

I have uploaded a Word file containing point-by-point responses to the Reviewers' comments.

Thank you.

Dr. Ngozi Adeleye

14 Nov 2022

PONE-D-22-18174R1Moderation analysis of exchange rate, tourism and economic growth in AsiaPLOS ONE

Dear Dr. Adeleye,

Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands.One of the reviewers consider that his/her comments have not been properly addressed. Please revise the previous comments and answer to the reviewer.Please submit your revised manuscript by Dec 29 2022 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office atgro.solp@enosolp. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file.

Please include the following items when submitting your revised manuscript:

• A rebuttal letter that responds to each point raised by the academic editor and reviewer(s). You should upload this letter as a separate file labeled 'Response to Reviewers'.

• A marked-up copy of your manuscript that highlights changes made to the original version. You should upload this as a separate file labeled 'Revised Manuscript with Track Changes'.

• An unmarked version of your revised paper without tracked changes. You should upload this as a separate file labeled 'Manuscript'.

If you would like to make changes to your financial disclosure, please include your updated statement in your cover letter. Guidelines for resubmitting your figure files are available below the reviewer comments at the end of this letter.

If applicable, we recommend that you deposit your laboratory protocols in protocols.io to enhance the reproducibility of your results. Protocols.io assigns your protocol its own identifier (DOI) so that it can be cited independently in the future. For instructions see: https://journals.plos.org/plosone/s/submission-guidelines#loc-laboratory-protocols. Additionally, PLOS ONE offers an option for publishing peer-reviewed Lab Protocol articles, which describe protocols hosted on protocols.io. Read more information on sharing protocols at https://plos.org/protocols?utm_medium=editorial-email&utm_source=authorletters&utm_campaign=protocols.

We look forward to receiving your revised manuscript.

Kind regards,

J E. Trinidad Segovia

Section Editor

PLOS ONE

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Reviewers' comments:

Reviewer's Responses to Questions

Comments to the Author

1. If the authors have adequately addressed your comments raised in a previous round of review and you feel that this manuscript is now acceptable for publication, you may indicate that here to bypass the “Comments to the Author” section, enter your conflict of interest statement in the “Confidential to Editor” section, and submit your "Accept" recommendation.

Reviewer #1:All comments have been addressed

Reviewer #2:(No Response)

Reviewer #3:(No Response)

**********

2. Is the manuscript technically sound, and do the data support the conclusions?

The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #1:Yes

Reviewer #2:Yes

Reviewer #3:Partly

**********

3. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #1:Yes

Reviewer #2:Yes

Reviewer #3:I Don't Know

**********

4. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #1:Yes

Reviewer #2:Yes

Reviewer #3:Yes

**********

5. Is the manuscript presented in an intelligible fashion and written in standard English?

PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here.

Reviewer #1:Yes

Reviewer #2:Yes

Reviewer #3:Yes

**********

6. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #1:This study brings novelty to the tourism literature by re-examining the role of exchange rate in the tourism-growth nexus. It differs from previous tourism-led growth narrative to probe whether tourism exerts a positive effect on economic growth when the exchange rate is accounted for. All corrections are enough for publishing.

Reviewer #2:Dear Authors,

I feel satisfied with this version and your replies on my comments. Therefore, I have decided the acceptance for this paper.

Best,

Reviewer #3:I do not believe that the authors have taken my comments seriously. It is not enough to say: "we are using GMM" because it is a large class of models. What are the instruments? What are the moment conditions? Authors say they do not use GMM based on lagged values (Arellano Bond, Arellano Bover) but another approach. So what exactly is it?

**********

7. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files.

If you choose “no”, your identity will remain anonymous but your review may still be made public.

Do you want your identity to be public for this peer review? For information about this choice, including consent withdrawal, please see our Privacy Policy.

Reviewer #1:Yes:Volkan Dayan

Reviewer #2:No

Reviewer #3:No

**********

[NOTE: If reviewer comments were submitted as an attachment file, they will be attached to this email and accessible via the submission site. Please log into your account, locate the manuscript record, and check for the action link "View Attachments". If this link does not appear, there are no attachment files.]

While revising your submission, please upload your figure files to the Preflight Analysis and Conversion Engine (PACE) digital diagnostic tool,https://pacev2.apexcovantage.com/. PACE helps ensure that figures meet PLOS requirements. To use PACE, you must first register as a user. Registration is free. Then, login and navigate to the UPLOAD tab, where you will find detailed instructions on how to use the tool. If you encounter any issues or have any questions when using PACE, please email PLOS atgro.solp@serugif. Please note that Supporting Information files do not need this step.

15 Nov 2022

Dear Editor,

Uploaded a Word file containing the response to Reviewer's comments.

Thank you.

Dr. Ngozi ADELEYE

24 Nov 2022

PONE-D-22-18174R2Moderation analysis of exchange rate, tourism and economic growth in AsiaPLOS ONE

Dear Dr. ADELEYE,

Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands.

I have to congratulate the authors for their efforts and the reviewers for their valuable comments. This latest version clearly shows a very substantial improvement on the manuscript.

However, there is still a minor issue to be resolved. In particular, the reviewer is asking for some probes on the robustness of the results.

Therefore, we invite you to submit a revised version of the manuscript that addresses the points raised during the review process.Please submit your revised manuscript by Jan 08 2023 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office atgro.solp@enosolp. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file.

Please include the following items when submitting your revised manuscript:

• A rebuttal letter that responds to each point raised by the academic editor and reviewer(s). You should upload this letter as a separate file labeled 'Response to Reviewers'.

• A marked-up copy of your manuscript that highlights changes made to the original version. You should upload this as a separate file labeled 'Revised Manuscript with Track Changes'.

• An unmarked version of your revised paper without tracked changes. You should upload this as a separate file labeled 'Manuscript'.

If you would like to make changes to your financial disclosure, please include your updated statement in your cover letter. Guidelines for resubmitting your figure files are available below the reviewer comments at the end of this letter.

If applicable, we recommend that you deposit your laboratory protocols in protocols.io to enhance the reproducibility of your results. Protocols.io assigns your protocol its own identifier (DOI) so that it can be cited independently in the future. For instructions see: https://journals.plos.org/plosone/s/submission-guidelines#loc-laboratory-protocols. Additionally, PLOS ONE offers an option for publishing peer-reviewed Lab Protocol articles, which describe protocols hosted on protocols.io. Read more information on sharing protocols at https://plos.org/protocols?utm_medium=editorial-email&utm_source=authorletters&utm_campaign=protocols.

We look forward to receiving your revised manuscript.

Kind regards,

J E. Trinidad Segovia

Section Editor

PLOS ONE

Journal Requirements:

Please review your reference list to ensure that it is complete and correct. If you have cited papers that have been retracted, please include the rationale for doing so in the manuscript text, or remove these references and replace them with relevant current references. Any changes to the reference list should be mentioned in the rebuttal letter that accompanies your revised manuscript. If you need to cite a retracted article, indicate the article’s retracted status in the References list and also include a citation and full reference for the retraction notice.

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Reviewers' comments:

Reviewer's Responses to Questions

Comments to the Author

1. If the authors have adequately addressed your comments raised in a previous round of review and you feel that this manuscript is now acceptable for publication, you may indicate that here to bypass the “Comments to the Author” section, enter your conflict of interest statement in the “Confidential to Editor” section, and submit your "Accept" recommendation.

Reviewer #3:All comments have been addressed

**********

2. Is the manuscript technically sound, and do the data support the conclusions?

The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented.

Reviewer #3:Yes

**********

3. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #3:Yes

**********

4. Have the authors made all data underlying the findings in their manuscript fully available?

The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified.

Reviewer #3:Yes

**********

5. Is the manuscript presented in an intelligible fashion and written in standard English?

PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here.

Reviewer #3:Yes

**********

6. Review Comments to the Author

Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters)

Reviewer #3:Now with the paper specifying the actual method and the choice of instruments, the only thing that is lacking is providing test statistics to check for the validity of instruments, i.e., the J statistic or equivalent and the discussion on the validity of instruments. The authors seem to treat the IV-GMM technique as a solution to several econometric problems but they do not check whether the problems have been indeed solved.

**********

7. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files.

If you choose “no”, your identity will remain anonymous but your review may still be made public.

Do you want your identity to be public for this peer review? For information about this choice, including consent withdrawal, please see our Privacy Policy.

Reviewer #3:No

**********

[NOTE: If reviewer comments were submitted as an attachment file, they will be attached to this email and accessible via the submission site. Please log into your account, locate the manuscript record, and check for the action link "View Attachments". If this link does not appear, there are no attachment files.]

While revising your submission, please upload your figure files to the Preflight Analysis and Conversion Engine (PACE) digital diagnostic tool,https://pacev2.apexcovantage.com/. PACE helps ensure that figures meet PLOS requirements. To use PACE, you must first register as a user. Registration is free. Then, login and navigate to the UPLOAD tab, where you will find detailed instructions on how to use the tool. If you encounter any issues or have any questions when using PACE, please email PLOS atgro.solp@serugif. Please note that Supporting Information files do not need this step.

28 Nov 2022

Dear Editor,

I have uploaded a Word file containing responses to the comments of the Reviewer.

Thank you.

Dr. Ngozi ADELEYE

19 Dec 2022

Moderation analysis of exchange rate, tourism and economic growth in Asia

PONE-D-22-18174R3

Dear Dr. ADELEYE,

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Kind regards,

J E. Trinidad Segovia

Section Editor

PLOS ONE

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Reviewer #3:All comments have been addressed

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Reviewer #3:Yes

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3. Has the statistical analysis been performed appropriately and rigorously?

Reviewer #3:Yes

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Reviewer #3:Yes

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Reviewer #3:Yes

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Reviewer #3:After the latest additions, I recommend the paper for publication. It seems that instruments pass the required tests.

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Reviewer #3:No

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21 Dec 2022

PONE-D-22-18174R3

Moderation analysis of exchange rate, tourism and economic growth in Asia

Dear Dr. ADELEYE:

I'm pleased to inform you that your manuscript has been deemed suitable for publication in PLOS ONE. Congratulations! Your manuscript is now with our production department.

If your institution or institutions have a press office, please let them know about your upcoming paper now to help maximize its impact. If they'll be preparing press materials, please inform our press team within the next 48 hours. Your manuscript will remain under strict press embargo until 2 pm Eastern Time on the date of publication. For more information please contact gro.solp@sserpeno.

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Kind regards,

PLOS ONE Editorial Office Staff

on behalf of

Dr. J E. Trinidad Segovia

Section Editor

PLOS ONE