scholarly journals DOES INTERNATIONAL TOURISM PROMOTE ECONOMIC GROWTH? SOME EVIDENCE FROM INDONESIA

2021 ◽  
Vol 37 (3) ◽  
pp. 775-782
Author(s):  
Martahadi MARDHANI ◽  
◽  
M. Shabri Abd. MAJID ◽  
Abd. JAMAL ◽  
Said MUHAMMAD ◽  
...  
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Causal Relationship ◽  
Granger Causality ◽  
International Tourism ◽  
Long Run ◽  
Warm Hospitality ◽  
Tourism Sector ◽  
Growth Hypothesis

Realizing an increasing contribution of the tourism sector to global economies, this study intends to enrich the existing tourism literature by empirically exploring the short- and long-run dynamic causalities between tourism and economic growth in Indonesia over the period 1995 to 2017. For these purposes, cointegration, Fully Modified Least Squares (FMOLS), and Granger causality techniques are adopted. The study found a cointegration between tourism and economic growth, indicating the existence of a long-run relationship between the tourism sector and economic growth. In the long-run, tourism has contributed to the promotion of economic growth. Finally, both in the short- and long-run, the study found a unidirectional causal relationship running from tourism to economic growth, confirming the tourism-led growth hypothesis. To enhance Indonesia's economic growth, the tourism sector should be further promoted by making it more attractive, supported by advanced IT facilities, warm hospitality, and diversified tourism objects.

scholarly journals Public debt and economic growth: contemporary evidence from a developing economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sam Kris Hilton
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Granger Causality ◽  
Public Debt ◽  
Consumption Expenditure ◽  
Government Consumption ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Investment Spending

Purpose Considering the continuous rise in the public debt stock of developing countries (particularly Ghana) with the unstable economic growth rate for the past decades and the recent borrowing because of the impact of COVID 19, this paper aims to examine the causal relationships between public debt and economic growth over time. Design/methodology/approach The paper uses a dynamic multivariate autoregressive-distributed lag (ARDL)-based Granger-causality model to test the causal relationships between public debt and economic growth [gross domestic product (GDP)]. Annual time-series data that spanned 1978–2018 were sourced from the World Bank Development Indicator database and the IMF fiscal Affairs Department Database and WEO. Findings The results reveal that public debt has no causal relationship with GDP in the short-run but there is unidirectional Granger causality running from public debt to GDP in the long run. Again, investment spending has a negative bi-directional causal relationship with GDP in the short-run but they have a positive bi-directional causal relationship in the long run. Conversely, no short-run causal relationship exists between government consumption expenditure and GDP but long-run Granger causality runs from government consumption expenditure to GDP. Finally, public debt has a positive impact on the inflation rate in the short run. Practical implications The findings imply that government(s) must ensure high fiscal discipline to serve as a precursor for the effective and efficient use of recent borrowing, that is, the loans should be used for highly prioritized projects (preferably investment spending) that are well evaluated and self-sustained to add positively to the GDP. Originality/value This paper provides contemporary findings to augment extant literature on public debt and economic growth by using variables and empirical models, which prior studies could not sufficiently cover in a developing country perspective and affirms that public debt contributes to GDP only in the long run.

Testing the Tourism-Led Growth hypothesis: The case of Malta

2009 ◽  
Vol 59 (3) ◽  
pp. 331-343 ◽  
Author(s):  
S. Katircioglu
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Relevant Literature ◽  
International Tourism ◽  
Test Results ◽  
Causality Test ◽  
Mediterranean Countries ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Causality Tests

Tourism-Led Growth (TLG) hypothesis results are inconclusive for Mediterranean countries in the relevant literature. This study contributes to the literature by employing the bounds test for co-integration and Granger causality tests to investigate level relationship and the direction of causality between international tourism and economic growth in the case of Malta. Results reveal that a long-run equilibrium relationship exists between international tourism and economic growth in the case of Malta. On the other hand, Granger causality test results suggest that both the Tourism-Led Growth and output-driven tourism hypotheses can be inferred for Malta since there is bidirectional causation between international tourism and economic growth.

scholarly journals Testing tourism-led economic growth and economic-driven tourism growth hypotheses

Tourism ◽  
2020 ◽  
Vol 68 (1) ◽  
pp. 43-57
Author(s):  
Khatai Aliyev ◽  
Nargiz Ahmadova
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Resource Curse ◽  
Crowding Out ◽  
Long Run ◽  
Tourism Sector ◽  
Tourism Resource ◽  
Short Run ◽  
Growth Hypothesis

This paper empirically investigates a causal relationship between tourism and economic growth in Georgia for 1997-2018 period by employing ARDLBT approach to cointegration. Results reject economic-driven tourism growth hypothesis for Georgia and reveal that impact of tourism development over economic growth is negative in the long-run, in contrary positive in the short-run. Obtained results suggest that there is a possibility to have a tourism resource curse in the long-term in Georgia. Georgian government should build a tourism strategy to avoid crowding out of human capital from industrial production and decrease the share of imports for the needs of tourism sector

scholarly journals Democracy and Growth Nexus in Indonesia

2020 ◽  
Vol 20 (2) ◽  
pp. 208-221
Author(s):  
Azwar Iskandar ◽  
Achmat Subekan
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Granger Causality ◽  
Control Variable ◽  
Political Stability ◽  
Ordinary Least Squares ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

The objective of this study is to analyze the causality between democracy and economic growth in Indonesia for the period of 1995 to 2017. More specifically, this paper  also attends to investigate the existence of a long-run relationship between them. This study perform a multivariate cointegration test with political stability as a control variable and cross-check this long-run relationship with an autoregressive distributed lag (ARDL) model approach to cointegration. This study also use the Granger causality test within a vector error correction model (VECM) framework and estimate three different models using a non-linear specification: Ordinary Least Squares (OLS) estimation, Fully Modified OLS (FM-OLS) and Dynamic Ordinary Least Squares (DOLS). The results show cointegration among the variables specified in the model when political stability is taken into account. Indeed, for economic growth and democracy to move together in the long run, they need to be associated with political stability. The tests for Granger causality conducted show a long-run causality running from GDP and political stability to democracy. In other word, the economic growth and political stability Granger cause democracy. It is the economic performance that influences democracy and not the reverse. In short-run, there is neutrality causation between democracy and growth, democracy and political stability, growth and political stability. These results suggest that economic growth through strong institutions is a precondition for democratization.

Testing tourism-led growth hypothesis in Laos?

2018 ◽  
Vol 73 (2) ◽  
pp. 242-251 ◽  
Author(s):  
Phouphet Kyophilavong ◽  
John Luke Gallup ◽  
Teerawat Charoenrat ◽  
Kenji Nozaki
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Tourism Development ◽  
Causality Test ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Causality Tests ◽  
Econometric Approach ◽  
Growth Hypothesis

Purpose The purpose of this paper is to investigate the tourism-led growth hypothesis in Laos. Design/methodology/approach The authors test the tourism-led growth hypothesis using autoregressive distributed lag (ARDL) cointegration estimation (Pesaran et al., 2001) and Granger causality tests. Findings The results of this paper show that when tourism is forcing variable, there is no long-run relationship between tourism development and economic growth. The Granger causality test demonstrates that there is a uni-directional causality running from economic growth in tourism. Social implications The empirical results and policy recommendation may be useful for other small developing countries. Originality/value This study is the first study to investigate the relationship between tourism development and growth in Laos, using a relatively new econometric approach – ARDL bound testing.

scholarly journals TOURISM – ECONOMIC GROWTH NEXUS. THE CASE OF ROMANIA

2020 ◽  
Vol 26 (4) ◽  
pp. 867-884
Author(s):  
Alina Badulescu ◽  
Daniel Badulescu ◽  
Ramona Simut ◽  
Simona Dzitac
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Foreign Currency ◽  
Causal Effect ◽  
International Tourism ◽  
Long Run ◽  
International Tourist ◽  
Short Run ◽  
The Relationship ◽  
Academic Debate

The development of tourism is usually associated, in positive terms, with economic development, foreign currency inflows, employment opportunities, infrastructure improvements, sustainable development and poverty alleviation. However, the nature of the tourism-growth relationship is still a matter of academic debate, and, perhaps, an expression of the inconsistencies and contradictions of public policies designed to support this industry. Researchers and practitioners have not yet come to an agreement on a number of fundamental questions: does tourism stimulate economic growth or the converse, and whether the causality, if it does exist, is uni or bidirectional, is constant or can change its direction in the medium - or long run. The present paper investigates the relationship between Gross Domestic Product (GDP) per capita and international tourism in Romania, over the 1995–2016 period. Our results show that the causal effect of the GDP on the international tourist arrivals and on the international tourism receipts is significant in the long run in Romania. In the short-run, we find a unidirectional causal relationship from the international tourism receipts to GDP, and a bidirectional causal relationship between GDP and the number of international tourist arrivals.

Does agricultural sector foreign direct investment promote economic growth of Pakistan? Evidence from cointegration and causality analysis

2019 ◽  
Vol 16 (4) ◽  
pp. 196-207 ◽  
Author(s):  
Abbas Ali Chandio ◽  
Amir Ali Mirani ◽  
Rashid Usman Shar
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Empirical Study ◽  
Least Squares ◽  
Granger Causality ◽  
Direct Investment ◽  
Agricultural Sector ◽  
Content Type ◽  
Long Run ◽  
Johansen Cointegration

Purpose The purpose of this paper is to examine the linkage between agricultural sector foreign direct investment (FDI) and economic growth in Pakistan over the period from 1991 to 2013. Design/methodology/approach In this study, the stationary analysis is performed by using Phillips–Perron and Dickey–Fuller generalized least squares unit root tests and Johansen cointegration technique to determine the long-run linkage among the studied variables. The robustness of long-run linkage is checked by employing autoregressive distributed lag (ARDL) approach, dynamic ordinary least squares (DOLS), fully modified ordinary least square method (FMOLS) and the canonical cointegration regression (CCR). The causal linkage between the selected variables is investigated by the VECM Granger causality test. Findings The results of the Johansen cointegration test confirmed a cointegrating association between the variables. In addition, the results of the ARDL, DOLS, FMOLS and CCR showed that agricultural sector FDI has a strong positive significant effect on economic growth in long run. Moreover, the findings of the present empirical study revealed that there exists bidirectional Granger causality between the agricultural sector FDI and economic growth in both short run and long run. Originality/value The present empirical study filled the literature gap of applying the Granger causality based on error-correction model to examine this relevant issue for Pakistan.

The link between tourism activities and economic growth: Evidence from China’s provinces

2016 ◽  
Vol 19 (1) ◽  
pp. 3-14 ◽  
Author(s):  
Tsung-Pao Wu ◽  
Hung-Che Wu
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Policy Implications ◽  
Hunan Province ◽  
International Tourism ◽  
Empirical Results ◽  
Study Support ◽  
Reverse Relationship ◽  
Growth Hypothesis ◽  
Support Evidence

This study explores the causal relationship between international tourism receipts and economic growth in China’s eight central provinces (Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei and Hunan) by analyzing these provinces for the period from 1995 to 2014, accounting for both dependency and heterogeneity across provinces. The empirical results of this study support evidence for the growth hypothesis in Hunan Province. A reverse relationship supports evidence on the conservation hypothesis for the provinces, such as Shanxi, Jiangxi, and Henan. A reciprocal causal relationship was found for Jilin, Anhui, and Hubei, while the result of a neutrality hypothesis supported only one of the provinces in Heilongjiang. The empirical findings of this study provide important policy implications for China’s eight central provinces.

scholarly journals A Cointegration Analysis of Economic Growth and CO_2 Emissions: A Case Study of Malaysia.

2019 ◽  
Vol 9 (1) ◽  
pp. 1 ◽  
Author(s):  
Ejiro U. Osiobe
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Granger Causality ◽  
Cointegration Analysis ◽  
Kuznets Curve ◽  
Annual Data ◽  
Explanatory Variables ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run

The paper aims to establish a long-run and the Granger causal relationship between economic growth,  emissions, international trade, energy consumption, and population density in Malaysia. The study will use annual data from 1970 to 2014. A unique cointegrating relationship between our variables  was identified. The study employed the Auto-Regressive Distributed Lag  model to examine the Environmental Kuznets Curve . Our empirical results analysis showed a long-run relationship between per capita  emissions  and our explanatory variables . To investigate the Granger causal relationship between , the Vector Error Correction Model  was employed and our results, associated the absence of Granger causality between  emissions and economic growth  in the short-run while revealing a uni-directional Granger causality movement  from economic growth to  emissions in the long-run. Hence, an increase in  will lead to a rise in  emissions in Malaysia.

Causality Between Tourism and Economic Development: The Case of China

2020 ◽  
Vol 25 (4) ◽  
pp. 365-381 ◽  
Author(s):  
Tsung-Pao Wu ◽  
Hung-Che Wu
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Inner Mongolia ◽  
Granger Causality Test ◽  
International Tourism ◽  
Causality Test ◽  
Panel Granger Causality ◽  
Reverse Relationship ◽  
Growth Hypothesis ◽  
Support Evidence

This study applies a bootstrap panel Granger causality test to examine the causal relationship between international tourism receipts and economic growth in 20 regions of China for the period from 1995 to 2015, accounting for both dependency and heterogeneity across regions. The empirical results support evidence for the growth hypothesis in the regions, such as Anhui, Henan, Hubei, Ningxia, and Shannxi. A reverse relationship supports evidence on the conservation hypothesis for the regions, such as Hunan and Inner Mongolia. A reciprocal causal relationship was found in Qinghai and Tibet, while the result of a neutrality hypothesis supported 11 of these 20 major regions (i.e., Chognqing, Gansu, Guangxi, Guizhou, Heilongjiang, Jiangxi, Jilin, Shanxi, Sichuan, Xinjiang and Yunnan).

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