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An Analysis of the Impact of Economic Growth, Political Instability and Exchange Rate on Tourism Growth in South Africa

Daniel Francois Meyer ()
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Daniel Francois Meyer: North-West University

No 04DM, Proceedings of the 11th International RAIS Conference, November 19-20, 2018 from Research Association for Interdisciplinary Studies

Abstract: Globally the tourism sector is one of the main economic sectors in attracting and generating foreign revenue. The sector accounts for seven percent of global foreign revenue as an export industry. In South Africa the low growth environment over the last decade has resulted in the need to find alternative economic sectors in support to traditional sectors such as mining and manufacturing, to drive higher levels of economic growth in the country. The aim of this study was to analyse the relationship between tourism as the dependent variable, and economic growth, exchange rate changes and political stability, as independent variables. The study region selected is South Africa, which is classified as a developing country and is in many cases seen as the proxy for emerging economies. This study followed a quantitative research approach with time series data from 1996 to 2017. The relationships between the variables were analysed by means of the Johansen cointegration, Vector Error Correction and Granger causality econometric models. The results indicated that there are both long and short-run relationships between the variables. A number of policy recommendations that could potentially contribute to the extension of the role of tourism in development include improved political and currency stability in the country as well as the relaxation of visa requirements.

Keywords: Economic growth; political instability; South Africa; tourism (search for similar items in EconPapers)
Pages: 9 pages
Date: 2018-11
New Economics Papers: this item is included in nep-afr and nep-tur
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Published in Proceedings of the 11th International RAIS Conference on Social Sciences and Humanities, November 19-20, 2018, pages 22-31

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