PREDOMINANT FACTORS AFFECTING COMMUNITY’S WILLINGNESS TO INVEST IN TOURISM INDUSTRY

Abstract

Investment drives the economic growth of a country because it is a component of aggregate demand and more importantly it influences the productive capacity of the economy. This article investigates local communities’ willingness to invest in tourism industry, focusing specifically on tourism development. A quantitative approach was adopted and a self – administered questionnaire was used to collect data from 382 respondents from the six districts of Langkawi. Empirical results indicate that knowledge, expectation of benefit, motivation and attitude effects community willingness to invest and savings has the highest effect on investment. In addition, local communities play significant roles in tourism development. Tourism has contributed to the country’s economic growth through tourist arrivals with substantial receipts, as such, tourism development requires considerable investment. This study shows that tourism development is related to local community willingness to invest in tourism industry. Moreover, this study provides some suggestions for local authorities in terms of increasing community investment.