Empirical examination of intersectoral linkages between tourism and regional economy by using the social accounting matrix

Abstract

Purpose: The main objectives of this study are to analyze the role of the tourism sector as measured by multiplier effects and linkages in the economy’s output, employment, and income distribution. Design/methodology/approach: The Social Accounting Matrix model was utilized by using the methods of Linkage Analysis, Multiplier Analysis, Multiplier Decomposition, Structural Path Analysis (SPA) and simulation analysis. Findings: The results show that the tourism sector contributes greater portion to the economic output, than other economic sectors in Bali. It also generates more equal income distribution and employment. However, the simulation shows that the tourism sector has not focused on increasing the income of the lower classes in rural areas. Practical implications: This study is practically useful for policy makers and entrepreneurs in the tourism sector to expand the tourism base in rural areas by actively involving lower economic groups as labor and supplier partners. Originality/value: This study originally investigated the linkages between agriculture and tourism from various economic perspectives of output, income distribution and employment.