Economics at your fingertips  

Tourism and financial development in South Africa: A trivariate approach

Mercy T Musakwa and Nicholas Odhiambo

No 29826, Working Papers from University of South Africa, Department of Economics

Abstract: In this study, we examine the causal relationship between tourism and financial development in South Africa using data from 1995 to 2017. The study attempts to establish if financial development Granger-cause tourism in South Africa? Autoregressive distributed lag (ARDL) bounds testing approach and ECM-based Granger causality test were used to examine the link. When broad money was used as a proxy for financial development, a unidirectional causality from tourism to financial development was found in the short and the long run. However, when domestic credit provided by financial sector and market capitalisation of domestic listed companies were used as proxies, a bidirectional causal effect was confirmed in the short run and a unidirectional causal relationship from financial development to tourism in the long run. The results confirm the reinforcing effect between tourism and financial development in the short run with financial development taking the centre stage in the long run.

Keywords: Financial development; tourism; South Africa; real effective exchange rate; ECM-based causality testing (search for similar items in EconPapers)
Date: 2022-12
New Economics Papers: this item is included in nep-fdg and nep-tur
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... RIATE%20APPROACH.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Working Papers from University of South Africa, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Shaun Donovan ().

Page updated 2023-05-25
Handle: RePEc:uza:wpaper:29826