Does Social Globalization Affect the Relationship Between International Tourism and Economic Growth?

Abstract

This study examines the moderating effect of social globalization on the relationship between international tourism and economic growth using a dataset of 143 economies from 1995 to 2017. Social globalization is broadly defined as the sharing of cultures and beliefs which facilitates the flow of ideas and knowledge. Our results show that social globalization affects economic growth directly and indirectly through enhancing international tourism. However, we find that the direct effect of international tourism on growth is not statistically significant for developing economies. On the other hand, tourism-dependent developing economies can benefit from growth as social globalization increases. This implies that policymakers can promote growth by developing institutions and infrastructure to enhance social globalization, such as implementing visa-free travel and the construction of international airports, to enhance the growth-gains from international tourism.