AbstractThis paper aims to study the impact of Middle East_s tourist arrival towards economic growth in Sarawak. Augmented Dicky-Fuller (ADF) is used to find the stationary of the variables. Besides that, Johansen Cointegration Test and VAR Granger Causality Test are used to address the objectives of study. The results revealed the existence of a short run relationship only between the variables of GDP, Middle East_s tourist arrivals, government expenditure and exchange rate in Sarawak. In addition, the VAR granger causality test indicated that GDP causes both GE and ER in the short run unidirectional respectively. However, the META granger cause the GDP and GE in unidirectional in the short run respectively.
Keywords Causality, cointegration, VAR..