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A nonlinear approach to the tourism-led growth hypothesis: the case of the MERCOSUR

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  • Juan Gabriel Brida
  • Bibiana Lanzilotta
  • Juan Sebastián Pereyra
  • Fiorella Pizzolon

Abstract

This paper analyses the tourism-led growth hypothesis for the four countries of the MERCOSUR regional trade block. By applying nonlinear techniques, we explore whether tourism activity leads – in the long run – to economic growth, or, alternatively, economic expansion drives tourism growth, or indeed a bidirectional relationship exists between the two variables. To this end, non-parametric cointegration and causality tests are applied to quarterly data for the period 1990–2011. We show the existence of a cointegrated relationship between real per capita gross domestic product and tourism expenditure for all countries. Moreover, the linearity of this relation is rejected for both Argentina and Brazil (economies with a relatively diversified structure). The non-parametric causality tests confirm in all cases the causality from tourism to growth. Meanwhile, only for Uruguay and Argentina causality also goes in the inverse direction (from growth to tourism). Finally, the paper compares the results of the nonlinear approach with those obtained by using the traditional linear methodology.

Suggested Citation

  • Juan Gabriel Brida & Bibiana Lanzilotta & Juan Sebastián Pereyra & Fiorella Pizzolon, 2015. "A nonlinear approach to the tourism-led growth hypothesis: the case of the MERCOSUR," Current Issues in Tourism, Taylor & Francis Journals, vol. 18(7), pages 647-666, July.
    • Handle: RePEc:taf:rcitxx:v:18:y:2015:i:7:p:647-666
    DOI: 10.1080/13683500.2013.802765
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    Cited by:

    1. Garrod Brian & Almeida António & Machado Luiz, 2023. "Modelling of nonlinear asymmetric effects of changes in tourism on economic growth in an autonomous small-island economy," European Journal of Tourism, Hospitality and Recreation, Sciendo, vol. 13(2), pages 154-172, December.
    2. Oluwatosin Adeniyi & Terver T Kumeka & Samuel Orekoya & Wasiu Adekunle, 2023. "Impact of tourism development on inclusive growth: A panel vector autoregression analysis for African economies," Tourism Economics, , vol. 29(3), pages 612-642, May.
    3. 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.
    4. Dogan, Ergun & Zhang, Xibin, 2023. "A nonparametric panel data model for examining the contribution of tourism to economic growth," Economic Modelling, Elsevier, vol. 128(C).

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