Page 341 - Contributed Paper Session (CPS) - Volume 4

CPS2258 Siti Norfadillah Md Saat et al.
help improve the people's standard of living, especially the younger
generation.
The health tourism industry is also dynamic and volatile due to various
factors such as economic climate, travel restrictions, geopolitical shifts,
domestic policy changes, political instability, advertising practices and
innovative and new treatment options contribute towards a shift in the pattern
of consumption and production of health services in a domestic and overseas
market (Zion Market Research, 2018).
Health tourism in Malaysia has emerged as one of the fastest growing
segments over the last few years. The intensification of the industry can be
seen from the increasing number of international patients into the country. In
2017, Malaysia received 1,038,632 healthcare travellers with revenue of
RM1,265.8 million. In 2018, Malaysia Healthcare Travel Council (MHTC) aims
to achieve RM1.3 billion in revenue, and potentially contribute RM5 billion to
the nation’s gross domestic product. Table 1 indicates the number of
healthcare travellers visit Malaysia and the real GDP for year 2012 to 2017.

Table 1: Number of Healthcare Travellers Visit Malaysia and GDP, 2012 – 2017

Year 2012 2013 2014 2015 2016 2017
Healthcare Travellers
(Persons) 648,132 770,134 837,718 853,875 921,481 1,038,632
Real GDP (RM' million) 912,261 955,080 1,012,448 1,063,998 1,108,311 1,173,177
Source: Department of Statistics Malaysia (DOSM) and Malaysia Healthcare Travel Council
(MHTC)
This paper intends to study the relationship between real GDP of Malaysia and
healthcare travellers to Malaysia.

2. Literature Review
A review of the literature indicates that health tourism has usually been
considered a positive contribution to economic growth. In recent years, many
countries have been actively promoting health tourism to stimulate economic
growth. Chor Foon Tang (2015) examines the effect of medical tourism on
economic growth in Malaysia. The cointegration, Granger causality and also
the Generalised Variance Decomposition are applied. The results indicate that
economic growth, medical tourism and other determinants in Malaysia are
cointegrated. Moreover, the empirical results suggest that medical tourism
Granger-cause economic growth in Malaysia, regardless of short or long run.
Harun Uçak (2016) investigates the effect of health and social service
sector growth on the flow of inbound health tourism in Turkey by employing
Granger causality and Johansen cointegration approaches. The findings
suggested that there is a long-run Granger causality from domestic health and
social work expenditures to health tourism income whereas this is non-
existence in the opposite direction. Another finding of the study is that there

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