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Article
Publication date: 15 February 2023

Arif Gulzar Hajam, Shahina Perween and Mushtaq Ahmad Malik

Tourism–economy relationship in India has been studied extensively in the past literature using a single equation approach. However, the present paper diverted from this trend and…

Abstract

Purpose

Tourism–economy relationship in India has been studied extensively in the past literature using a single equation approach. However, the present paper diverted from this trend and examined the tourism–economy relationship using the specific to general modelling approach over the 1990–2018 time period. The study also accounts for the influence of merchandise trade, capital formation, foreign investment inflows and inflation on economic growth to achieve the robustness of the coefficient estimates.

Design/methodology/approach

To achieve the objective, the study utilised a specific to general modelling strategy. First, the regression equation includes only three core variables: gross domestic product (GDP), international tourist receipts and international tourist expenditures. Next, the authors include other control variables in the regression equation one by one, leading us to test five model types for investigating the cointegration among the variables. As for the estimation technique, the authors employed autoregressive distributed lag (ARDL) approach.

Findings

The paper's findings highlight that tourism receipts and expenditures exert a positively significant impact on economic growth. Moreover, including the additional independent variables does not substantially change the tourism and economic growth relationship. The existence of one-way causality from tourism expenditures to economic growth supports the tourism-led growth hypothesis. These findings highlight the rationale for intervention by the government and policymakers to promote tourism potential and facilities to accelerate the overall growth performance of the country. While the existence of one-way causal effect from economic growth to tourism revenues supports the growth-led tourism development hypothesis, implying that economic expansion is necessary for tourism development.

Research limitations/implications

This research article tried to present a comprehensive picture of India's tourism–economy relationship. However, the present study is organised as an aggregate economy-level analysis. It assumed that the aggregate tourism sector is homogenous. However, different tourism sectors exert different levels of influence on the economy. The authors expect future research can take the disaggregated analysis of the tourism–economy relationship.

Practical implications

This study provides valuable insights into the tourism-led growth hypothesis in India. The study highlights comprehensive intervention by the government and policymakers for accelerating tourism development to invigorate the overall growth performance of the country over the long run. The principal recommendation emerging from the present research is that the tourism growth potential can be depended upon to stimulate the economic performance of the Indian economy.

Originality/value

The present study diverted from the previous empirical studies by following a specific to general modelling strategy. First, the regression model includes only three core variables such as economic growth, tourism receipts and tourism expenditure. Next, the authors include other control variables in the regression equation one by one, leading us to test five model types for investigating the cointegrating relationship among the variables. GDP growth rate is used as a dependent variable in all five specifications. The idea is to expand the model to capture every feature of the data generating process.

Details

Journal of Hospitality and Tourism Insights, vol. 7 no. 1
Type: Research Article
ISSN: 2514-9792

Keywords

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 been…

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

Keywords

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

Keywords

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

Keywords

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 on the…

1362

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

Keywords

Article
Publication date: 13 December 2022

Miguel Puig-Cabrera, Ginesa Martínez-del Vas, Miguel Ángel Beltrán-Bueno and Abraham Nuevo-López

The purpose of this study is to contrast the capacity of tourism-specialized and non-tourism-specialized systems in small developing insular societies to achieve a well-being…

Abstract

Purpose

The purpose of this study is to contrast the capacity of tourism-specialized and non-tourism-specialized systems in small developing insular societies to achieve a well-being model aligned with the Agenda 2030.

Design/methodology/approach

The empirical method of this work consists of a panel-corrected standard errors analysis for a total of seven Caribbean Small Island Developing States (SIDS) to measure the contribution of both economic diversification and tourism specialization to well-being in the Agenda 2030 framework. Time period considered in the analysis include 2005–2019.

Findings

Linear and nonlinear relationships reveal the need to conjugate both tourism specialization and economic diversification in the 2030-development agendas of small developing insular societies as both represent a means to achieve a well-being model aligned with the Agenda 2030.

Originality/value

One of the main novelties of this work is that development is analyzed from a multidimensional point of view (standard of living, access to education and health services), as an integrated thinking that considers any tourism development model that defines a route with Sustainable Development Goals (SDGs) and Agenda 2030 as main destination in SIDS. Specifically, practical implications are given combining recommendations to foster development and face poverty (SDG-1), while inequalities situations are reduced (SDG-10) and decent jobs are generated (SDG-8). These implications also focus on strengthening local suppliers of goods and services from other sectors to be integrated into the destination value chain (SDG-2), ensuring access to education (SDG-4) and contributing to gender equality (SDG-5).

方法论

这项工作的实证方法包括对7个加勒比海小岛屿发展中国家进行面板校正标准误差(PCSE)分析, 以衡量经济多样化和旅游专业化对2030年议程框架中的福祉的贡献。分析中考虑的时间段包括2005–2019年。

目的

这项工作的目的是对比小型发展中岛国社会的旅游专业系统和非旅游专业系统的能力, 以实现与2030年议程相一致的福祉模式。

研究结果

线性和非线性关系表明, 在发展中小岛国社会的2030年发展议程中, 需要将旅游专业化和经济多样化结合起来, 因为两者都是实现与2030年议程一致的福祉模式的手段。

原创性/价值

这项工作的主要创新点之一是, 从多维的角度(生活水平、受教育机会和健康服务)来分析发展, 作为一种综合思维, 考虑任何旅游发展模式, 确定了一条以可持续发展目标和2030年议程为主要目的地的小岛屿发展中国家路线。具体来说, 在减少不平等状况(SDG-10)和创造体面工作(SDG-8)的同时, 结合促进发展和面对贫困(SDG-1)的建议, 给出了实际意义。此外, 要加强其他部门的货物和服务的当地供应商, 以融入目的地价值链(SDG-2), 保证受教育的机会(SDG-4)和促进性别平等(SDG-5)。

Metodología

El método empírico de este trabajo consiste en un análisis de errores estándar corregidos por panel (PCSE) para 7 Pequeños Estados Insulares en Desarrollo para medir la contribución al bienestar a través de la especialización turística y la diversificación económica en el marco de la Agenda 2030. El horizonte contemplado en el análisis incluye 2005–2019.

Objetivo

El objetivo de este trabajo es contrastar la capacidad de los sistemas especializados y no especializados en turismo dentro de las pequeñas sociedades insulares en desarrollo para lograr un modelo de bienestar alineado con la Agenda 2030.

Resultados

Las relaciones lineales y no lineales revelan la necesidad de conjugar tanto la especialización turística como la diversificación económica en las agendas de desarrollo 2030 de las pequeñas sociedades insulares en desarrollo, ya que ambas representan un medio para alcanzar un modelo de bienestar alineado con la Agenda 2030.

Originalidad

Una de las principales novedades de este trabajo es que se analiza el desarrollo desde un punto de vista multidimensional (nivel de vida, acceso a la educación y servicios de salud), como un pensamiento integrado que considera cualquier modelo de desarrollo turístico que defina una ruta con los ODS y la Agenda 2030 como destino principal en los PEID. En concreto, se ofrecen implicaciones prácticas que combinan recomendaciones para fomentar el desarrollo y hacer frente a la pobreza (ODS-1), al tiempo que se reducen las situaciones de desigualdad (ODS-10) y se generan empleos decentes (ODS-8). Asimismo, fortalecer a los proveedores locales de bienes y servicios de otros sectores para que se integren en la cadena de valor del destino (ODS-2), garantizar el acceso a la educación (ODS-4) y contribuir a la igualdad de género (ODS-5).

Book part
Publication date: 15 March 2022

You-How Go and Cheong-Fatt Ng

The aim of this chapter is to examine the role of real exchange rates in the relationship between tourist arrival and economic growth in Malaysia over the period of 2000–2018. We…

Abstract

The aim of this chapter is to examine the role of real exchange rates in the relationship between tourist arrival and economic growth in Malaysia over the period of 2000–2018. We disaggregate Malaysian tourists into six geographical regions, namely Asia, Singapore, Europe, Pacific region, Americas, and Africa. Using a non-linear autoregressive distributed lag model, we find that the appreciation of real exchange rates with positive growth of economy plays a prominent role in influencing international tourist arrivals from Singapore, other Asian countries, Pacific region, Europe, and Americas. Our study suggests that real appreciation is important in providing some insights into the effectiveness of growth-led-tourism policies. In line with this, some implications are provided at the end of this chapter.

Details

Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-80117-313-1

Keywords

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 a new…

447

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

Open Access
Article
Publication date: 2 November 2022

Panayiotis Tzeremes

The study aims to investigate the nexus between total factor productivity and tourism growth in Latin American countries for time series data from 1995 to 2017.

Abstract

Purpose

The study aims to investigate the nexus between total factor productivity and tourism growth in Latin American countries for time series data from 1995 to 2017.

Design/methodology/approach

Using the extension of the Granger noncausality test in the nonlinear time-varying of Ajmi et al. (2015), the study points out the interconnectedness between the variables during the period.

Findings

The study found nonlinear causality between the variables. Particularly, studying the conclusions for the time-varying Granger causality fashion, it can be noticed that the one-way causality from total factor productivity to tourism growth is obtained for Argentina, Bolivia, Brazil, Uruguay and Venezuela, while the vice versa is confirmed for Chile, Ecuador and Nicaragua. Lastly, the study dissected the plots of the curve causality.

Practical implications

In view of the results, some crucial policy implications could be suggested, such as, under certain circumstances and as an exceptional case, the use of policy instruments such as targeted investment, marketing and the support of tourism organizations focused on driving a tourism-led-based productivity and/or tourism programs and projects.

Originality/value

The current work is distinguished from the existing body of understanding in several substantial directions. This work explores, for the first time, the linkages between the total factor productivity index and tourism growth for Latin American countries. No single attempt has been known to investigate this interaction by using nonlinear causality, and this study determines the shape of the curve between the total factor productivity index and tourism growth for each country.

Details

Journal of Economics, Finance and Administrative Science, vol. 27 no. 54
Type: Research Article
ISSN: 2218-0648

Keywords

Open Access
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 group of…

4484

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

Keywords

1 – 10 of 283