The Impact of Tourism on Small Business Performance: Empirical Evidence from Malaysian Islands
Prof. Dr. Pazim Othman, Dr. M. Mohd. Rosli
The tourism industry has become an important sector to both developed and developing countries, including Malaysia. Acknowledging positive advantages of tourism, much research has been carried out on small business in the tourism industry. However, direct impact of tourism on business performance is totally ignored. This paper presents an empirical result of a study on the impact of tourism on small businesses performance operating on four main tourist destination islands in Malaysia. Employing primary data collected from small tourism businesses on the four islands and a multiple regression analysis, this study found that tourism as measured by tourist arrivals and tourist customers has significant positive impact on the financial and non-financial performance of the small businesses. This finding consolidates tourism development theory that tourism is an important catalyst for entrepreneurial development and small business performance. It also justifies the government efforts in promoting and developing the tourism industry in general and island tourism in particular.
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