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Article
Publication date: 20 November 2017

Maxwell K. Hsu, Junzhou Zhang and Yamin Ahmad

This study aims to examine the relationship between tourism development and economic growth while considering exports simultaneously. Governments in many countries have…

Abstract

Purpose

This study aims to examine the relationship between tourism development and economic growth while considering exports simultaneously. Governments in many countries have been developing and deploying strategies to attract tourism receipts as a means for economic growth. However, assessing the potential impact of tourism on economic growth among large economies is still in its infancy.

Design/methodology/approach

Using a vector error correction model framework, this study examines the relationship among exports, gross domestic product (GDP) and tourism receipts (including international tourism receipts and domestic tourism receipts in two separate models) with macro data that covers two recent decades (1994-2013) in China.

Findings

The empirical findings confirm the existence of a long-term equilibrium relationship in each of these two tri-variate models. The empirical findings reveal that (1) both tourism-led-growth and export-led-growth hypotheses are supported, (2) the growth rate of tourism receipts exhibit a higher relevance with GDP growth than export growth and (3) the growth rate of international tourism shows a higher relevance with GDP growth than domestic tourism growth.

Originality/value

Using macroeconomic data collected by the Chinese government, the current study employs an advanced econometric methodology to explore the potential benefits of tourism on economic growth in China.

Details

Information Discovery and Delivery, vol. 45 no. 4
Type: Research Article
ISSN: 2398-6247

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Article
Publication date: 20 April 2015

Charbel Bassil, Mohamad Hamadeh and Nisrine Samara

The purpose of this paper is to study the direction of the causality between tourism development and economic growth in Lebanon between 1995 and 2013, after taking into…

Abstract

Purpose

The purpose of this paper is to study the direction of the causality between tourism development and economic growth in Lebanon between 1995 and 2013, after taking into consideration terrorist incidents and their intensities. These are considered as exogenous shocks that affect tourism development and economic growth instantaneously and with a lag.

Design/methodology/approach

To reach the objectives, the authors estimate a vector auto regressive model with exogenous variables, applying a series of unit root tests with and without structural breaks and the Granger causality test.

Findings

The findings suggest a positive unidirectional causality running from tourism development to economic growth in the short run. Thus, the authors find evidence for the tourism-led growth hypothesis (TLGH) in Lebanon despite the exposure of the country to frequent terrorist incidents. The impulse response functions reveal that tourism development (economic growth) responds positively to a positive shock to economic growth (tourism development).

Practical implications

The findings call for Lebanese policy makers aiming at promoting growth to design policies that encourage tourism, such as implementing tourism marketing policies and building the needed tourism infrastructure. Such policies will have positive but transitory effects on economic growth. The findings may also be useful for regional representatives of intergovernmental organizations and the offices of statistics of United Nations World Tourism Organization and the World Bank to better understand the tourism industry in Lebanon and similar countries suffering from instabilities.

Originality/value

This paper contributes to the existing literature in three points: despite the importance of the tourism industry to the Lebanese economy, this topic did not receive careful attention in the literature; it takes into consideration the presence of structural breaks and possible nonlinearities in the number of tourist arrivals; and it investigates the TLGH after accounting for instability in the country.

Details

Tourism Review, vol. 70 no. 1
Type: Research Article
ISSN: 1660-5373

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Article
Publication date: 7 February 2018

Phouphet Kyophilavong, John Luke Gallup, Teerawat Charoenrat and Kenji Nozaki

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

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.

Details

Tourism Review, vol. 73 no. 2
Type: Research Article
ISSN: 1660-5373

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Article
Publication date: 8 November 2018

Boopen Seetanah and Sheereen Fauzel

Although it is a widely accepted fact that climate change can negatively impact on tourism demand and affect the economies at the socio-economic level, empirical studies…

Abstract

Purpose

Although it is a widely accepted fact that climate change can negatively impact on tourism demand and affect the economies at the socio-economic level, empirical studies on the climate change tourism development nexus has been quite scant, especially for the case of island economies that are heavily dependent on tourism. This study aims to supplement the literature on climate change and tourism by empirically assessing the relationship between climate change and tourist arrivals for the case of 18 small island developing states over the period from 1989 to 2016.

Design/methodology/approach

This paper uses dynamic panel data techniques, namely, a panel vector autoregressive framework, which accounts for dynamic and endogeneity issues.

Findings

The results from the analysis confirm the existence of a significant relationship between climate change and tourism demand in both the long-run and short run. Further analysis shows a bi-directional causality between climatic change and tourism demand while the study also confirms the tourism led growth hypothesis.

Research limitations/implications

This research supplements the literature on the tourism-environment link, especially for tourism dependent island economies.

Practical implications

Results from this study are important to policymakers who should spare no effort to mitigate the effect of adverse climatic change in the context of tourism development.

Originality/value

This study is built on a unique data set for a sample of island economies and interestingly adopts dynamic panel data analysis to account for dynamics and endogenity in the climate change-tourism development nexus.

Details

Tourism Review, vol. 74 no. 2
Type: Research Article
ISSN: 1660-5373

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Article
Publication date: 5 February 2020

Reinardus Suryandaru

The purpose of this paper is to explore the long-run relationship and causality between economic activity and inbound tourism in the context of the Indonesian economy with…

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276

Abstract

Purpose

The purpose of this paper is to explore the long-run relationship and causality between economic activity and inbound tourism in the context of the Indonesian economy with a new quantitative methodology.

Design/methodology/approach

This research applies a new modified bounds testing approach of Pesaran et al. (2001) by Kripfganz and Schneider (2018) with the period of observation from 1974 to 2017.

Findings

The results suggest that there is a unidirectional causality from economic activity to inbound tourism.

Research limitations/implications

This research applies the linear autoregressive distributed lag (ARDL) model and only uses bivariate variables to examine the existence of the tourism-led growth hypothesis. Further studies for the Indonesian case may apply a nonlinear ARDL model. Also, the addition of other socio-economic variables, especially those related to domestic tourism activity, can be applied to improve the model.

Practical implications

This work will provide an alternative quantitative methodology for scholars in studying the relationship between tourism and economic variables.

Social implications

The findings in this research can complement touristic-public policy decision, and the methodology may be important for knowledge transfer.

Originality/value

This is the first quantitative study to measure tourism-led growth hypothesis in Indonesia by using the latest modified bounds testing approach.

Details

International Journal of Culture, Tourism and Hospitality Research, vol. 14 no. 2
Type: Research Article
ISSN: 1750-6182

Keywords

Content available
Article
Publication date: 2 April 2020

Sheereen Fauzel

Based on a panel vector error correction model (PVECM), this study aims to investigate the impact of foreign direct investment (FDI) on tourism development in a selected…

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2024

Abstract

Purpose

Based on a panel vector error correction model (PVECM), this study aims to investigate the impact of foreign direct investment (FDI) on tourism development in a selected group of 17 small island economies during 1995-2018. In the long run, a positive and direct relationship was found between foreign investment and tourists’ arrival. Moreover, economic performance and tourists’ income were also found to be key determinants of tourism development. It is further observed that there is bidirectional causality between the two variables. Hence, one can argue that FDI is a key element for tourism development. So, if the countries can attract more FDI and grow economically, these elements will contribute positively to the sector in the future.

Design/methodology/approach

This work uses rigorous dynamic time series analysis, namely, a dynamic PVECM, which takes into account dynamism and endogeneity issues in tourism modelling. Furthermore, the PVECM is also appropriately suited for integrating short- and long-run analysis.

Findings

The results confirm that FDI has been an important ingredient in the tourism development of the island economies in the long run. Interestingly, a bidirectional causality between FDI and tourism development is validated. Moreover, growth will as well be important. So, if the country can attract more FDI and grow economically, these elements will attract the tourists of the future.

Originality/value

Relatively few studies have rigorously studied the relationships between FDI and tourism development, particularly with respect to developing countries and small island states which rely heavily on tourism as well as FDI. As such existing research has neglected dynamic and reverse causality analysis in their respective FDI-tourism modelling. This study thus attempts to address the above and supplement the literature by investigating the direct and indirect relationship between FDI and tourism development for the case of small island economies over the period 1995-2018. Moreover, the implication of foreign capital inflows on tourism futures will as well be developed.

Details

Journal of Tourism Futures, vol. 7 no. 1
Type: Research Article
ISSN: 2055-5911

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Article
Publication date: 11 November 2019

Fabio Mazzola, Pietro Pizzuto and Giovanni Ruggieri

The purpose of this paper is to verifying the economic resilience of islands and, in particular, the role of the tourism sector in the reaction to the most recent economic…

Abstract

Purpose

The purpose of this paper is to verifying the economic resilience of islands and, in particular, the role of the tourism sector in the reaction to the most recent economic crisis. The analysis concerns insular contexts, such as the greater island regions in the Mediterranean basin.

Design/methodology/approach

Static and dynamic panel data techniques are used for a sample of 13 island economies over a period of 16 years.

Findings

Results show that the growth factors for regional islands are similar to the ones usually considered for other regions, but the tourism-led growth hypothesis is highly supported. Tourism demand more than supply plays a role together with accessibility. The crisis has reduced the importance of tourism supply, while tourism demand and accessibility have remained crucial for growth together with other traditional engines of growth.

Originality/value

To the best of authors’ knowledge, none of the current works has considered territorial determinants and tourism indicators inside the same framework analyzing growth in island economies by considering the changes occurred during the crisis explicitly.

Details

Journal of Economic Studies, vol. 46 no. 7
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 8 August 2019

David N. Aratuo, Xiaoli L. Etienne, Tesfa Gebremedhin and David M. Fryson

The purpose of this study is to investigate the causal linkages between tourism and economic growth in the USA and determine how they respond to shocks in the system.

Abstract

Purpose

The purpose of this study is to investigate the causal linkages between tourism and economic growth in the USA and determine how they respond to shocks in the system.

Design/methodology/approach

The study uses a variety of time series procedures, including the bounds test, Granger causality test, impulse response functions and generalized variance decomposition to analyze the relationship between monthly tourist arrivals (TA) to the USA, real gross domestic product (GDP) and real effective exchange rates.

Findings

Results suggest that GDP Granger causes TA in the USA in the long run, indicating the economy-driven tourism growth hypothesis. Additionally, a shock to GDP generates a positive and significant effect on TA that persists in the long-run, while exchange rate shocks only have a significant effect in the first six months.

Research limitations/implications

Different tourism sectors may exert different degrees of influence on the economy. The use of aggregate data on TA in the analysis assumes homogeneity in the industry, thus, only represents the average relationship between tourism and GDP.

Practical implications

This study provides insight that shapes the investment, marketing, sustainability decisions of the public and private sectors aim at increasing tourist flows to drive economic development at the national, state and local levels.

Originality/value

Though several studies have examined the factors influencing the international tourist demand of the USA, this is the first to investigate the causal relationships between tourism, GDP and exchange rates for the USA. It is also the first in the US tourism literature to account for the nature of interactions between the three variables because of innovations in the system.

Details

International Journal of Contemporary Hospitality Management, vol. 31 no. 9
Type: Research Article
ISSN: 0959-6119

Keywords

Content available
Article
Publication date: 26 September 2019

Claudia Susana Gómez López and Karla Susana Barrón Arreola

This paper aims to study the relationship between employment and tourism activities as well as economic variables for the 32 states of Mexico for the period 1999-2014.

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6132

Abstract

Purpose

This paper aims to study the relationship between employment and tourism activities as well as economic variables for the 32 states of Mexico for the period 1999-2014.

Design/methodology/approach

To study the case of Mexico, the authors use panel data and cointegration panel data. They also use geographic information systems to observe changes over time between the variables, which is useful in the empirical evidence.

Findings

The main results obtained by the models are as following: domestic tourism is the variable with the greatest impact on the generation of direct employment in the tourism sector, a finding supported by both methodologies; economic growth (measured by state gross domestic product) also directly impacts the generation of employment; and the cointegration of the panels causes a long-term equilibrium among the states and some variables.

Research limitations/implications

The model used leaves out other variables that may influence the performance of the tourist activity. In addition, given the availability of official and homogeneous information, it only covers what has been documented up to 2014.

Social implications

The aim is to measure the impact of tourism on the variables at the state level, where the economic activities could be based on public policies, as well as the importance of tourism activities in generating employment. In this sense, the impact would be in channeling efforts to support the main economic activities and could serve as a starting point for the evaluation of programs to promote domestic tourism.

Originality/value

This paper reviews the relationship that exists between tourism activity and its effect on other variables, especially employment. It is the first time that these topics are studied for the Mexican economy.

Details

Journal of Tourism Analysis: Revista de Análisis Turístico, vol. 26 no. 2
Type: Research Article
ISSN: 2254-0644

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Book part
Publication date: 1 March 2021

Filippo Grasso and Daniele Schilirò

Tourism is growing globally and expanding into increasingly differentiated thematic areas and places that have thus far been unknown. The Mediterranean region is one of…

Abstract

Tourism is growing globally and expanding into increasingly differentiated thematic areas and places that have thus far been unknown. The Mediterranean region is one of the leading tourism areas in the world accounting for one-third of global tourism receipts and half of global tourism arrivals. However, the countries of this region, undoubtedly attractive for their natural and cultural sites, history and traditions, must face the continuous challenges that the highly competitive global market and the sustainability of the environment and resources pose.

This chapter aims to examine and discuss the relationship between tourism and economic growth in the Mediterranean region, specifically, the issue of economic growth led by tourism and its central focus in public policy. The tourism–economic growth relationship will also highlight the different challenges between the developed and the developing countries. The relationship between tourism and sustainability in the Mediterranean region is the second theme of this contribution. The concept of ‘slow tourism’ as an operational proposal for sustainable tourism is also discussed; specifically, the natural environment and the cultural heritage need to be preserved by all tourism stakeholders.

Details

Tourism in the Mediterranean Sea
Type: Book
ISBN: 978-1-80043-901-6

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