Is tourism an accelerator of economic growth? Evidence from South Asian region

Abstract

AbstractThe present study aims to investigate the impact of tourism on the economic growth of the South Asian region. By employing panel data of six South Asian economies spanning from 1998 to 2017, our empirical investigation relies upon the panel cointegration and Fully Modified Ordinary Least Squares (FMOLS) techniques. Consistent with the “Tourism Led Growth Hypothesis”, the results prove a significant positive and long-run association between tourism and economic growth. The novelty of our study is the presentation of two models which confirm that tourism is an independent accelerator of economic growth, and it performs the same role even in the presence of standard income determinants. These findings are robust when we apply alternate statistical techniques, such as, dynamic ordinary least square method and Granger Causality Test. It implies that the South Asian economies should focus on the development of the tourism sector with permanent development in public infrastructures, like public transport, airports, road system and telecommunication to surge their economic growth.