Tourism and economic growth revisited: Empirical evidence from a Panel VAR approach

Nikolaos Antonakakis, Mina Dragouni, Bruno Eeckels and George Filis

MPRA Paper from University Library of Munich, Germany

Abstract: The current literature on the tourism-economic growth causal relationship has not yet reached to a clear empirical consensus. The aim of this paper is to revisit this ambiguous relationship by examining the dynamics between tourism and economic growth from a more holistic view. In particular, we focus on 113 countries over the period 1995-2011, which we group into clusters based on six different criteria. A Panel Vector Autoregressive model is employed to reveal the tourism-economy interdependencies across these clusters. Overall, our findings cannot support the tourism-led economic growth hypothesis in any of our clusters. Rather, the economic-driven tourism growth hypothesis seems to prevail is most cases, although some short-lived bidirectional causalities are also identified. Thus, depending on the level of tourism competitiveness and economic development different policy implications apply.

Keywords: Tourism income; economic growth; panel vector autoregressive model; generalised impulse responses; clusters. (search for similar items in EconPapers)
JEL-codes: C32 F43 L83 O40 O57 (search for similar items in EconPapers)
Date: 2015-10-23
New Economics Papers: this item is included in nep-tur
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:67419

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