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Testing tourism-led growth hypothesis in Laos?

Phouphet Kyophilavong (Faculty of Economics and Business Management, National University of Laos, Vientiane, Laos)
John Luke Gallup (Department of Economics, Portland State University, Portland, Oregon, USA)
Teerawat Charoenrat (Faculty of Business Administration, Indo-China Country International Trade and Economic Research Sector, Khon Kaen University, Nong Khai, Thailand)
Kenji Nozaki (Faculty of Economics, Takasaki City University of Economics, Takasaki, Japan)

Tourism Review

ISSN: 1660-5373

Article publication date: 7 February 2018

Issue publication date: 1 May 2018

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Abstract

Purpose

The purpose of this paper is to investigate the tourism-led growth hypothesis in Laos.

Design/methodology/approach

The authors test the tourism-led growth hypothesis using autoregressive distributed lag (ARDL) cointegration estimation (Pesaran et al., 2001) and Granger causality tests.

Findings

The results of this paper show that when tourism is forcing variable, there is no long-run relationship between tourism development and economic growth. The Granger causality test demonstrates that there is a uni-directional causality running from economic growth in tourism.

Social implications

The empirical results and policy recommendation may be useful for other small developing countries.

Originality/value

This study is the first study to investigate the relationship between tourism development and growth in Laos, using a relatively new econometric approach – ARDL bound testing.

Keywords

Citation

Kyophilavong, P., Gallup, J.L., Charoenrat, T. and Nozaki, K. (2018), "Testing tourism-led growth hypothesis in Laos?", Tourism Review, Vol. 73 No. 2, pp. 242-251. https://doi.org/10.1108/TR-03-2017-0034

Publisher

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Emerald Publishing Limited

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