Impact of Terrorism on Tourism in India

Yashobanta Parida, Parul Bhardwaj () and Joyita Roy Chowdhury
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Parul Bhardwaj: University of Delhi & Institute of Economic Growth

Economics Bulletin, 2015, vol. 35, issue 4, 2543-2557

Abstract: This present study empirically examines the impact of terrorism activities on inbound tourism and foreign exchange earnings from tourism in India using annual data covering period 1980-2011. The empirical estimates based on an ARDL approach show that, there exists an inverse relation between terrorism activity and foreign tourist arrival in India. Similarly, there exists a positive relationship between economic development (proxied by per capita income) and tourist arrival in India. For robustness check we have included physical development indicators such as fixed telephone subscriptions (per 100 people) and railway line (total route-km). Railway infrastructure shows a positive and significant impact on foreign tourist arrivals and foreign exchange earnings in India.The findings of the study suggest that, Government should invest more in the tourism sector, which would help in generating more employment and foreign exchange earnings. Further, the empirical results also suggest that the measures adopted by the Government of India such as bringing 150 countries under the ambit of Visa-On-Arrival as well as increasing FDI in the sector will go a long way in stepping up inbound tourist arrivals and consequently boosting foreign exchange earnings as well. Additionally, the Government must also work to improve the tourism infrastructure and provide a greater sense of security for tourists, particularly women, among other things.

Keywords: Terrorism; Tourism; ARDL Model; India (search for similar items in EconPapers)
JEL-codes: E6 O1 (search for similar items in EconPapers)
Date: 2015-12-13
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Citations: View citations in EconPapers (3)

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