Investigating the Role of Tourism in Economic Growth: Empirical Evidence from Pakistan

Muhammad Azam, Mahdiat Mahdiat, Hafeez Muhammad Haroon and Bakhtyar Baher
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Mahdiat Mahdiat: Abdul Wali Khan University, Faculty of Business & Economics, Department of Economics, Pakistan
Hafeez Muhammad Haroon: Bahauddin Zakria University, Institute of Management Sciences, Pakistan
Bakhtyar Baher: University of Sheffield, USIC, Business & Economics Department, United Kingdom

Polish Journal of Sport and Tourism, 2022, vol. 29, issue 1, 39-47

Abstract: Introduction. This study aims to explore the impact of tourism along with some other regressors, namely labor force, official development assistance, local investment, and inflation rate on the economic growth rate of the developing country of Pakistan. Material and Methods. We used annual time series data over the period from 1980 to 2018 for empirical analysis. Based on the order of integration of data, we employed an Autoregressive Distributed Lag (ARDL) approach. Results. Empirical results vindicated a positive relationship between tourism and growth. The official development assistance and inflation rate have shown significantly negative impacts on the economic growth of Pakistan, whereas domestic investment has shown an insignificantly positive impact on the economic growth. Conclusions. The empirical findings exhibit that tourism plays a key role in the process of economic growth and development of Pakistan. The study recommends that the management authorities should implement appropriate policies to attract more tourists to improve economic growth of Pakistan. Furthermore, sincere efforts are required to ensure macroeconomic stability through controlling inflation, avoiding reception of foreign aid, and encouraging global investment.

Keywords: tourism; economic growth; time series data; Pakistan (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:spotou:v:29:y:2022:i:1:p:39-47:n:2

DOI: 10.2478/pjst-2022-0007

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