Tourism Industry and Economic Growth Nexus in Beijing, China

Yang Songling, Muhammad Ishtiaq and Bui Thi Thanh
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Yang Songling: School of Management and Economics, Beijing University of Technology, Beijing 100081, China
Muhammad Ishtiaq: School of Management and Economics, Beijing University of Technology, Beijing 100081, China
Bui Thi Thanh: School of Management and Economics, Beijing University of Technology, Beijing 100081, China

Economies, 2019, vol. 7, issue 1, 1-15

Abstract: In the developing economy, tourism is the most visible and steadiest growing facade. Tourism is considered one of the rapidly increasing elements for economic development from the last two decades. Therefore, the proposed study used vector autoregression (VAR) model, error correction model (ECM), and the Granger causality to check the relationship between the tourism industry and economic growth based on the data of the Beijing municipal bureau of statistics from 1994 to 2015. Gross domestic product (GDP) is used as a replacement variable for the economic growth index, while internal tourism revenue is used as a tourism industry indicator. The study supports the tourism-led growth hypothesis proposed in the existing literature in a different survey of tourism and economic development. The results show that there is a strong relationship in the tourism industry and economic growth in the context of Beijing, and at the same time, tourism creates a more significant increase in long run local real economic accomplishments. The results of the VAR model confirm that in the long run, Beijing’s economic growth is affected by domestic tourism, while the ECM model shows unidirectional results in the short term. Similarly, there is a one-way causal relationship between the tourism industry and economic growth in Beijing, China. The empirical results are in strong support of the concept that tourism causes growth.

Keywords: tourism; economic growth; cointegration test; VAR model; and ECM model (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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