Abstract

Tourist receipts is a crucial determinant inMalaysian economic growth. However, environmental hazardsdue to climate change is perceived as potential threats totourism. This paper aims to understand the effect ofenvironmental hazards on the international tourist arrivals inMalaysia. Malaysian monthly data was analyzed using thelinear regression approach to examine the tourism-ledeconomic growth. Granger Causality Test is employed to testfor directional cause analysis among variables. Overall resultsalso show that an increase in environmental hazards thatmoderated with international tourist arrivals leads to a lowerMalaysian economic growth in Malaysia. Meanwhile, better airquality boosts the number of international tourist arrivals,hence stimulates Malaysian economic growth. Grangercausality results indicate that there exists a bidirectional causebetween international tourist arrivals and climate change(temperature, and thunderstorm) but a unidirectional causalityexists between international tourist arrivals and economicgrowth, carbon emission, air quality and rainfall, respectively.Effective mitigation of climate change needs to be implementedby the authorities to reduce the environmental risk.