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The Complex Relationship between International Tourism Demand and Economic Growth: An Analysis on Central and Eastern European Economies

Author

Listed:
  • Alina Badulescu

    (University of Oradea, Oradea, Romania)

  • Daniel Badulescu

    (University of Oradea, Oradea, Romania)

  • Ramona Simu?

    (University of Oradea, Oradea, Romania)

Abstract

Tourism is widely considered as driver for economic growth, and the “tourism-led-growth hypothesis” is often investigated in the literature. However, there is very limited literature examining how economic growth impacts tourism, an impact which is usually tacitly accepted, without being analytically investigated. In this paper we examine the impact of the economic growth on the number of international tourism arrivals and also on the international tourism receipts during 1995-2015, in Central and Eastern European economies, by using the Autoregressive Distributed Lag (ARDL) model. The bounds F-statistics for cointegration test provide evidence of a long-term relationship between the international tourism number of arrivals and GDP per capita only for Bulgaria, Croatia, Czech Republic, Estonia, Lithuania, Slovenia, Romania and Slovakia. Between international tourism receipts and GDP per capita we find a long-term relationship only for Bulgaria, Croatia, Slovakia, Latvia, Estonia, Poland, Romania and Czech Republic. We also explore causal relationship between the variables by using an error-correction-based Granger causality model (short-run and long-run), finding different unidirectional / bidirectional short/long-term relationships between international tourism demand (measured by two proxies: international tourist arrivals and international tourism receipts) and economic growth (measured by GDP per capita), in different countries. The paper contributes to better understanding the nature and the direction of the relationship between tourism sector and economic growth, aiming not only to enrich the literature in the field, but also to design specific economic growth policies with an impact on tourism sector.

Suggested Citation

  • Alina Badulescu & Daniel Badulescu & Ramona Simu?, 2018. "The Complex Relationship between International Tourism Demand and Economic Growth: An Analysis on Central and Eastern European Economies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 20(S12), pages 935-935, November.
    • Handle: RePEc:aes:amfeco:v:20:y:2018:i:s12:p:935
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    Cited by:

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    2. Haller Alina-Petronela, 2021. "The Contraction of European Economic Distances through Sustainable Tourism in the Pre-Pandemic Period," Zagreb International Review of Economics and Business, Sciendo, vol. 24(2), pages 105-134.
    3. Viorica Chirilă & Gina Ionela Butnaru & Ciprian Chirilă, 2020. "Spillover Index Approach in Investigating the Linkage between International Tourism and Economic growth in Central and Eastern European Countries," Sustainability, MDPI, vol. 12(18), pages 1-36, September.
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    6. Yong Su & Jacob Cherian & Muhammad Safdar Sial & Alina Badulescu & Phung Anh Thu & Daniel Badulescu & Sarminah Samad, 2021. "Does Tourism Affect Economic Growth of China? A Panel Granger Causality Approach," Sustainability, MDPI, vol. 13(3), pages 1-12, January.
    7. Wen-Chuan FU & Chia-Jui PENG & Tzu-Yi YANG, 2020. "Influence of Tourism on Economic Development in Asian Countries," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 5(2), pages 207-216, December.

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    More about this item

    Keywords

    international tourism demand; economic growth; Granger causality; ARDL model; Central and Eastern European countries.;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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