IDEAS home Printed from https://ideas.repec.org/a/aid/journl/v3y2020i4p29-47.html
   My bibliography  Save this article

The Relation between Tourism and Economic Growth: A Case of Saudi Arabia as an Emerging Tourism Destination

Author

Listed:
  • Lamia Jamel

    (Department of Finance and Economics, College of Business Administration, Taibah University, Medinah, Saudi Arabia)

Abstract

This paper examines empirically the relation between tourism and economic growth in Saudi Arabia. The authors try to justify how tourism contributes to the economic growth of Saudi Arabia. There are applied descriptive statistics, unit root test, VAR model and Granger Causality test as an econometric methodology to examine the connection between tourism and economic growth in Saudi Arabia for the annual data in the period from 1990 to 2018. The main empirical results of the study find out that tourism affects positively the economic growth in Saudi Arabia. Also, there is found a positive nexus among tourism and economic growth. Furthermore, CO2 emissions and financial development impact positively the tourism sector, while trade openness predicts a negative effect on tourism. Additionally, CO2 emissions, financial development, and trade openness have a positive impact on economic growth in Saudi Arabia. Finally, the Granger causality test provides evidence of bidirectional nexus between tourism and economic growth in Saudi Arabia. This paper contributes to the current research by explaining the causal nexus among tourism and economic growth in Saudi Arabia during the period from 1990 to 2018, applying a vector autoregressive model and Granger Causality.

Suggested Citation

  • Lamia Jamel, 2020. "The Relation between Tourism and Economic Growth: A Case of Saudi Arabia as an Emerging Tourism Destination," Virtual Economics, The London Academy of Science and Business, vol. 3(4), pages 29-47, October.
    • Handle: RePEc:aid:journl:v:3:y:2020:i:4:p:29-47
    DOI: 10.34021/ve.2020.03.04(2)
    as

    Download full text from publisher

    File URL: https://virtual-economics.eu/index.php/VE/article/download/83/60
    Download Restriction: no
    File URL: https://libkey.io/10.34021/ve.2020.03.04(2)?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jacint Balaguer & Manuel Cantavella-Jorda, 2002. "Tourism as a long-run economic growth factor: the Spanish case," Applied Economics, Taylor & Francis Journals, vol. 34(7), pages 877-884.
    2. Hasret Benar & Glenn P. Jenkins, 2008. "The Economics of Regulation and Taxation Policies for Casino Tourism," Tourism Economics, , vol. 14(3), pages 483-510, September.
    3. Marin, Dalia, 1992. "Is the Export-Led.Growth Hypothesis Valid for Industrialized Countries?," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 678-688, November.
    4. Rinaldo Brau & A. Lanza & F. Pigliaru, 2006. "How fast are small tourist countries growing? The 1980-2003 evidence," Working Paper CRENoS 200614, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    5. Mohammad Sharif Karimi, 2018. "The Linkage Between Tourism Development and Economic Growth in Malaysia: A Nonlinear Approach," International Economic Journal, Taylor & Francis Journals, vol. 32(1), pages 53-65, January.
    6. Song, Haiyan & Qiu, Richard T.R. & Park, Jinah, 2019. "A review of research on tourism demand forecasting," Annals of Tourism Research, Elsevier, vol. 75(C), pages 338-362.
    7. Ramesh Durbarry, 2004. "Tourism and Economic Growth: The Case of Mauritius," Tourism Economics, , vol. 10(4), pages 389-401, December.
    8. Shahzad, Syed Jawad Hussain & Shahbaz, Muhammad & Ferrer, Román & Kumar, Ronald Ravinesh, 2017. "Tourism-led growth hypothesis in the top ten tourist destinations: New evidence using the quantile-on-quantile approach," Tourism Management, Elsevier, vol. 60(C), pages 223-232.
    9. Jordan Shan & Ken Wilson, 2001. "Causality between trade and tourism: empirical evidence from China," Applied Economics Letters, Taylor & Francis Journals, vol. 8(4), pages 279-283.
    10. Faiza Manzoor & Longbao Wei & Muhammad Asif & Muhammad Zia ul Haq & Hafiz ur Rehman, 2019. "The Contribution of Sustainable Tourism to Economic Growth and Employment in Pakistan," IJERPH, MDPI, vol. 16(19), pages 1-14, October.
    11. N. Kulendran & Kenneth Wilson, 2000. "Is there a relationship between international trade and international travel?," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 1001-1009.
    12. Mahmut Bilen & Veli Yilanci & Hakan Eryüzlü, 2017. "Tourism development and economic growth: a panel Granger causality analysis in the frequency domain," Current Issues in Tourism, Taylor & Francis Journals, vol. 20(1), pages 27-32, January.
    13. Ronald R. Kumar & Radika Kumar, 2012. "Exploring the Nexus between Information and Communications Technology, Tourism and Growth in Fiji," Tourism Economics, , vol. 18(2), pages 359-371, April.
    14. Xu, Zhenhui, 1996. "On the Causality between Export Growth and GDP Growth: An Empirical Reinvestigation," Review of International Economics, Wiley Blackwell, vol. 4(2), pages 172-184, June.
    15. Gregory D. Clarke & David J. Hoaas, 2007. "Festival Economics: The Case of the Red River Revel," Tourism Economics, , vol. 13(1), pages 163-175, March.
    16. Brau, Rinaldo & Lanza, Alessandro & Pigliaru, Francesco, 2007. "How Fast are Small Tourism Countries Growing? Evidence from the Data for 1980–2003," MPRA Paper 82776, University Library of Munich, Germany.
    17. Holzner, Mario, 2011. "Tourism and economic development: The beach disease?," Tourism Management, Elsevier, vol. 32(4), pages 922-933.
    18. Yurii Kharazishvili & Aleksy Kwilinski & Olena Grishnova & Henryk Dzwigol, 2020. "Social Safety of Society for Developing Countries to Meet Sustainable Development Standards: Indicators, Level, Strategic Benchmarks (with Calculations Based on the Case Study of Ukraine)," Sustainability, MDPI, vol. 12(21), pages 1-21, October.
    19. Hanly, Paul A., 2012. "Measuring the economic contribution of the international association conference market: An Irish case study," Tourism Management, Elsevier, vol. 33(6), pages 1574-1582.
    20. Thornton, John, 1997. "Exports and economic growth: Evidence from 19th Century Europe1," Economics Letters, Elsevier, vol. 55(2), pages 235-240, August.
    21. Rinaldo Brau & Alessandro Lanza & Francesco Pigliaru, 2007. "How Fast are Small Tourism Countries Growing? Evidence from the Data for 1980–2003," Tourism Economics, , vol. 13(4), pages 603-613, December.
    22. Coulibaly Kigbajah Salifou & Ihtisham ul Haq, 2017. "Tourism, globalization and economic growth: a panel cointegration analysis for selected West African States," Current Issues in Tourism, Taylor & Francis Journals, vol. 20(6), pages 664-667, April.
    23. Bernardina Algieri, 2006. "An Econometric Estimation of the Demand for Tourism: The Case of Russia," Tourism Economics, , vol. 12(1), pages 5-20, March.
    24. Juan Gabriel Brida & Isabel Cortes-Jimenez & Manuela Pulina, 2016. "Has the tourism-led growth hypothesis been validated? A literature review," Current Issues in Tourism, Taylor & Francis Journals, vol. 19(5), pages 394-430, April.
    25. Melville Saayman & Riaan Rossouw, 2011. "The Significance of Festivals to Regional Economies: Measuring the Economic Value of the Grahamstown National Arts Festival in South Africa," Tourism Economics, , vol. 17(3), pages 603-624, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Franklin Omar Zavaleta Chavez Arroyo & Alex Javier Sánchez Pantaleón & Carlos Enrique Aldea Roman & Rosse Marie Esparza-Huamanchumo & José Álvarez-García, 2024. "A Structural Analysis of the Economic Impact of Tourism and the Perspective of Tourism Providers in Kuélap, Peru," Land, MDPI, vol. 13(1), pages 1-15, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jorge V Pérez-Rodríguez & Heiko Rachinger & María Santana-Gallego, 2022. "Does tourism promote economic growth? A fractionally integrated heterogeneous panel data analysis," Tourism Economics, , vol. 28(5), pages 1355-1376, August.
    2. Jun Zhang & Li Cheng, 2019. "Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China," Sustainability, MDPI, vol. 11(2), pages 1-22, January.
    3. Sadyrbek Kozhokulov & Xi Chen & Degang Yang & Gulnura Issanova & Kanat Samarkhanov & Selvina Aliyeva, 2019. "Assessment of Tourism Impact on the Socio-Economic Spheres of the Issyk-Kul Region (Kyrgyzstan)," Sustainability, MDPI, vol. 11(14), pages 1-18, July.
    4. Herman Sahni & Christian Nsiah & Bichaka Fayissa, 2021. "The African economic growth experience and tourism receipts: A threshold analysis and quantile regression approach," Tourism Economics, , vol. 27(5), pages 915-932, August.
    5. Salahodjaev, Raufhon & Safarova, Nilufar, 2015. "Do foreign visitors reward post-communist countries? A panel evidence for tourism-growth nexus," MPRA Paper 66215, University Library of Munich, Germany.
    6. Sheilla Nyasha & Nicholas M. Odhiambo & Simplice A. Asongu, 2021. "The Impact of Tourism Development on Economic Growth in Sub-Saharan Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(6), pages 1514-1535, December.
    7. Croes, Robertico & Ridderstaat, Jorge & van Niekerk, Mathilda, 2018. "Connecting quality of life, tourism specialization, and economic growth in small island destinations: The case of Malta," Tourism Management, Elsevier, vol. 65(C), pages 212-223.
    8. Mukesh Kumar & Sanjeev Prashar & RK Jana, 2019. "Does international tourism spur international trade and output? Evidence from wavelet analysis," Tourism Economics, , vol. 25(1), pages 22-33, February.
    9. Theodore Panagiotidis & Maurizio Mussoni & Georgios Voucharas, 2023. "How Important is Tourism for Growth?," Working Paper series 23-13, Rimini Centre for Economic Analysis.
    10. Younesse El Menyari, 2017. "International tourism and long-term economic growth: Analysis by heterogeneous dynamic panel data," Tourism Research Institute, Journal of Tourism Research, vol. 18(1), pages 134-147, November.
    11. Faiza Manzoor & Longbao Wei & Muhammad Asif & Muhammad Zia ul Haq & Hafiz ur Rehman, 2019. "The Contribution of Sustainable Tourism to Economic Growth and Employment in Pakistan," IJERPH, MDPI, vol. 16(19), pages 1-14, October.
    12. Jianping Zha & Zhiyong Li, 2017. "Drivers of tourism growth," Tourism Economics, , vol. 23(5), pages 941-962, August.
    13. Stefan F. Schubert, 2016. "A short-run model of a two-sector economy with tourism and unemployment," Tourism Economics, , vol. 22(4), pages 763-778, August.
    14. Namhyun Kim & HakJun Song & Ju Hyun Pyun, 2016. "The relationship among tourism, poverty, and economic development in developing countries," Tourism Economics, , vol. 22(6), pages 1174-1190, December.
    15. Inchausti-Sintes, Federico, 2015. "Tourism: Economic growth, employment and Dutch Disease," Annals of Tourism Research, Elsevier, vol. 54(C), pages 172-189.
    16. Holzner, Mario, 2011. "Tourism and economic development: The beach disease?," Tourism Management, Elsevier, vol. 32(4), pages 922-933.
    17. Roberto Balado-Naves & David Boto-García & José Francisco Baños-Pino, 2024. "A multisector growth model for testing the Tourism-Led Growth versus the Beach Disease hypotheses," Efficiency Series Papers 2024/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    18. María Santana-Gallego & Francisco Ledesma-Rodríguez & Jorge Pérez-Rodríguez, 2011. "Tourism and trade in OECD countries. A dynamic heterogeneous panel data analysis," Empirical Economics, Springer, vol. 41(2), pages 533-554, October.
    19. Robertico Croes & Manuel A. Rivera, 2017. "Tourism’s potential to benefit the poor," Tourism Economics, , vol. 23(1), pages 29-48, February.
    20. Theodore Panagiotidis & Thomas Panagiotou & Maurizio Mussoni, 2012. "Tourism Led Growth: Evidence from Panel Cointegration Tests," Working Paper series 74_12, Rimini Centre for Economic Analysis.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aid:journl:v:3:y:2020:i:4:p:29-47. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aleksy Kwilinski (email available below). General contact details of provider: https://edirc.repec.org/data/akwilin.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.