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Tourism is an industry which can contribute to the
high revenue of a country. Medical tourism is the sub-set of tourism industry
which now act as a potential contributor in economic sector. Both has the
ability to improve the economic growth of a nation and even can cause a decline
too. Generally, when there is decline in tourism industry, it will cause a slow
down in economic growth. But will this theory also applies to the medical
tourism industry?

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In a study by Tang (2015), he studies the
implication of medical tourism toward economic growth in Malaysia. The studies
found out that medical tourism and economic growth are cointegrated. Therefore,
both have long-run relationship and the result gained by medical tourism is
slightly higher than other variable. So, it proven that medical tourism is an
effective catalyst of growth which can help Malaysia gain the status of
developed country.

Moreover, there are still lack of past researcher
who had done this research by using econometric methodology except for Tang. He
used Vector Error Correction model 
(VECM) to measure the long run relationship and Variance Decomposition
method to find out which variables are the most exogenous. So, a study on this
line of research should be done so that we can explain the result in economic
ways suitable with this course.

Other than that, the gap that could be found between
the past researcher and this study is the year of research. This study will
measure data until the latest year which is 2016 and will be using annually
data apart from quarterly data that has been used by Tang (2015). So, through
this time series we would like to study whether there will be any different in
the result that will be getting.

Plus, this study will measure the factors in  medical tourism affecting economic growth
which will be a more detail study than other studies. This is because most past
research basically studies the medical tourism itself such as (Tang, 2015) and
(Chee, 2010) where both uses medical tourism’s data from Malaysia, Singapore
and Thailand to explains their studies.

growth is the theory that will be used in this study. It studies either tourism
causes economic growth or economic growth causes tourism. Tang (2015) found out
that tourism has led to the increase of economic growth in Malaysia.
Kartircioglu (2009) find out that tourism can lead to the growth of economy and
has support this theory while Oh (2015) find out otherwise where economic
growth lead to tourism growth. This result might be different due to the time
series uses, different data and country of studies. So, in this study, we would
like to find out the relationship between tourism and economic growth
especially the impacts by medical tourism.

Lastly, we would like to see at the end of this
study are the relationship between medical tourism and economic growth, whether
both have long-run or short-run relationship and does the TLGH is suitable in
this case study.











1.5.1 General Objective

main objective of this study is to determine the factors in medical tourism
affecting the economic growth in Malaysia.

1.5.2 Specific Objectives

To determine the relationship
between factors in medical tourism affecting economic growth in Malaysia.
To determine either the factors
affecting medical tourism has a long-run or short-run effects on economic
growth of Malaysia.
To estimate which variables in
medical tourism has the most effects towards economic growth in Malaysia.










research is done to look at the outcome for both its economic and social
outcomes. To strengthen Malaysia’s position in this medical tourism industry,
many initiatives has been done and many achievement have been achieved such as
in term of service quality and facilities.

foreign patients to be treated in Malaysia is important especially people from
the developed country. This is because it will lead to the increase in number
of foreign currency exchange which as well boost the economic growth. plus, it
will then lead to the increase in number of health expenditure. This aim is
crucial for the development and growth of the economy. Basically, medical
tourism is the combination between healthcare and medical purpose and
travelling which will bring monetary benefit to the country. This will then
slowly help the development of small and medium enterprises (SMEs) and will
open up more opportunity in entrepreneurial activities.

            Other than that, having highest
number of tourist arrival giving good news regarding the state of tourism
industry. It will also lead to the growth of our economy. So, to attract more
tourist arrival especially to medical tourism sector, promoting globally is
required. Plus, healthcare expenditure is needed to do the promoting by
upgrading infrastructure, facilities and service quality of the healthcare
institution. If the healthcare is improved, Malaysian can be benefitted
directly and also indirectly marks a higher stage of development.

            Lastly, medical tourism has
contributed a lot to the national income as it was identified by the National
Key Economic Area (NKEA) to soar our economy to high-income nation by 2020.
Plus, in 2016 alone, medical tourism has contributed almost RM4-5 billion to
the national economy (“2018 Budget: Medical tourism set to grow”, 2017). So,
this mean that medical tourism is significantly an emerging industry that need
a good plan making.


This study intends to investigate the relationship between the
unemployment rate and inflation rate. The study is organized as follows.
Chapter two review the literature on this area of study from the previous
studies that have been conducted by researchers. In this chapter, there will
divide into several section which include theoretical framework, empirical
testing procedures, empirical evidence and summary of previous studies.

The chapter three discuss about the methodology that will use in this
study. It is include about the data and the method that been use to conduct the
empirical analysis for this study. Similar to the previous chapter, it is also
divide into several sections such as theoretical framework, data description,
and empirical models.

The result of the empirical analysis will be discuss in chapter four.
Lastly, chapter five will covers the conclusion about the overall of this study
with the relevant recommendation.

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