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Tourism Led Growth Hypothesis: Has the Tourism industry an impact on The Economic Growth of Sao Tome and Principe?

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  • Elvira da Costa Ribeiro

    (College of Public Administration, Huazhong University of Science and Technology, Wuhan, P.R. China.)

  • Bing Wang

    (College of Public Administration, Huazhong University of Science and Technology, Wuhan, P.R. China.)

Abstract

The importance of the tourism sector as an economic activity has increased the interest of researchers trying to understand the impact of tourism on economic growth. Therefore, the purpose of the present quantitative research is to analyze the relationship between tourism and economic growth in the case of Sao Tome and Principe employing the Tourism-led growth hypothesis (TLGH) over the period of 1997-2018, using time-series data of the following variables: Gross Domestic Product (GDP), Tourism receipts (TR), Real Exchange Rate (EX), and Foreign Direct Investment (FDI). To achieve the proposed objective, first, the unit root test was applied; the result indicated that all the 4 variables are stationary at first difference I(1), futher the Johansen for cointegration was tested and found cointegration of two-equation. The Granger causality approach was employed to enlighten the direction of causality between the variables. A unidirectional relationship was found between TR and GDP, also between FDI and all the other variables (GDP, TR, ER).

Suggested Citation

  • Elvira da Costa Ribeiro & Bing Wang, 2020. "Tourism Led Growth Hypothesis: Has the Tourism industry an impact on The Economic Growth of Sao Tome and Principe?," International Journal of Economics and Financial Issues, Econjournals, vol. 10(1), pages 180-185.
    • Handle: RePEc:eco:journ1:2020-01-22
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    References listed on IDEAS

    as
    1. Brida, Juan Gabriel & Pereyra, Juan Sebastián & Such, María Jesús & Pulina, Manuela, 2011. "Causalidad entre turismo y crecimiento económico de largo plazo: una revisión crítica de la literatura econométrica [Causality between tourism and long-term economic growth: a critical review of th," MPRA Paper 37332, University Library of Munich, Germany, revised 2011.
    2. Nikolaos Dritsakis, 2004. "Tourism as a Long-Run Economic Growth Factor: An Empirical Investigation for Greece Using Causality Analysis," Tourism Economics, , vol. 10(3), pages 305-316, September.
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    Cited by:

    1. Azam Muhammad & Mahdiat Mahdiat & Hafeez Muhammad Haroon & Bakhtyar Baher, 2022. "Investigating the Role of Tourism in Economic Growth: Empirical Evidence from Pakistan," Polish Journal of Sport and Tourism, Sciendo, vol. 29(1), pages 39-47, March.
    2. Hasan Murat Ertugrul & Fatih Mangir, 2015. "The tourism-led growth hypothesis: empirical evidence from Turkey," Current Issues in Tourism, Taylor & Francis Journals, vol. 18(7), pages 633-646, July.
    3. Obed I. Ojonta & Jonathan E. Ogbuabor, 2024. "Effects of international tourism on environmental quality and renewable energy use in Africa: a study of the moderating role of governance institutions," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-37, August.
    4. Obed I. Ojonta & Jonathan E. Ogbuabor, 2024. "Effects of tourism and institutional quality on infrastructural development in Africa: new evidence from the system GMM technique," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 59(2), pages 101-117, April.
    5. Osinubi, Tolulope Temilola & Osinubi , Olufemi Bankole, 2020. "Inclusive Growth in Tourism-led Growth Hypothesis: Evidence from Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 8(2), July.

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    More about this item

    Keywords

    Tourism; economic growth; unit root; cointegration; causality;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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