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Impact of tourism development on inclusive growth: A panel vector autoregression analysis for African economies

Oluwatosin Adeniyi, Terver T Kumeka, Samuel Orekoya and Wasiu Adekunle

Tourism Economics, 2023, vol. 29, issue 3, 612-642

Abstract: The persistent debate among policy makers and academics around combating the high rates of poverty and income inequality can be further illuminated by understanding how tourism contributes to inclusive growth, especially in developing economies. Tourism sector can be regarded as one of the key contributors to inclusive growth and where it has the capacity to generate prospects for productive employment. The goal of this article is thus to investigate the link between inclusive growth and tourism in the African context. To do this, we utilized a recent panel vector autoregression (pVAR) and data for 45 African countries spanning the period 1995 to 2019. Thus, by the error variance decomposition and impulse response functions, our results showed a weak positive effect of international tourism arrivals and the composite tourism indicator on inclusive growth, while tourism receipts and tourism expenditure insignificantly decreases inclusive growth in the sampled African economies. Our result is further supported by the panel system generalized method of moments (GMM). We provide some policy implications from our findings.

Keywords: Tourism; tourism composite indicator; inclusive growth; panel data analysis; panel vector autoregression; system generalized method of moments; Africa (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:29:y:2023:i:3:p:612-642

DOI: 10.1177/13548166211061154

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