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New insights into an old issue – examining the influence of tourism on economic growth: evidence from selected small island developing states

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  • Samira Roudi
  • Huseyin Arasli
  • Seyi Saint Akadiri

Abstract

This paper uses relatively new heterogeneous panel autoregressive distributed lag cointegration methods to re-examine the long-run equilibrium and Granger causality relationship between tourism and economic growth for the small island developing states (SIDSs). In addition, the study incorporates energy consumption and foreign direct investment (FDI) as alternative growth determinants, during the period 1995–2014. After allowing for the heterogeneous country effect, a positive and statistically significant long-run equilibrium relationship between tourism, energy consumption, FDI, and gross domestic product, with a moderate convergence rate towards the long-run path is confirmed. The panel Granger causality test as proposed by Dumitrescu and Hurlin [(2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450–1460.] shows bidirectional causality running from tourism to economic growth, from tourism to energy consumption and from energy consumption to economic growth, and unidirectional causality between FDI and tourism, between economic growth and FDI, and between FDI and energy consumption. Our empirical findings provide support for tourism-induced growth, tourism-induced energy consumption, tourism-induced investment, and the energy consumption-economic growth relationship in the case of SIDSs. Our empirical results resonate with the existing findings with major policy implications for the SIDSs.

Suggested Citation

  • Samira Roudi & Huseyin Arasli & Seyi Saint Akadiri, 2019. "New insights into an old issue – examining the influence of tourism on economic growth: evidence from selected small island developing states," Current Issues in Tourism, Taylor & Francis Journals, vol. 22(11), pages 1280-1300, July.
    • Handle: RePEc:taf:rcitxx:v:22:y:2019:i:11:p:1280-1300
    DOI: 10.1080/13683500.2018.1431207
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    Citations

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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. 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.
    3. Murthi, Srinivash & Zhang, Wen & Shaturaev, Jakhongir, 2023. "Role of Tourism in Ensuring Gender Equity: An Asian Perspective," MPRA Paper 118486, University Library of Munich, Germany, revised 15 Jun 2023.
    4. Niccolò Comerio & Fausto Pacicco, 2024. "The role of tourism in reducing economic inequalities: the case of Italy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 41(3), pages 839-880, October.
    5. Uktam Umurzakov & Shakhnoza Tosheva & Raufhon Salahodjaev, 2023. "Tourism and Sustainable Economic Development: Evidence from Belt and Road Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 503-516, March.
    6. 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.
    7. Canh Phuc Nguyen & Binh Quang Nguyen & Duyen Thuy Le Tran, 2023. "Over two decades of severe deforestation: an economic perspective of tourism development," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 13(1), pages 83-104, March.

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