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The journey towards dollarization: the role of the tourism industry

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  • Ibrahim D. Raheem
  • Kazeem B. Ajide

Abstract

There has been an increasing wave of globalization since the turn of the millennium. This study focuses on two by-products of globalization: dollarization and tourism. Empirical studies have ignored the possible relationship between dollarization and tourism. However, we hypothesize that a booming tourism industry will fuel increase in the usage and circulation of foreign currencies, thus increasing the level of dollarization. The objective of this study is to examine the extent to which the tourism industry exacerbates the dollarization process of selected Sub-sahara African (SSA) countries. Using Tobit regression, we found that tourism positively affects dollarization. Our results are robust to: (i) alternative measures of tourism; (ii) accounting for endogeneity and outlier effects.

Suggested Citation

  • Ibrahim D. Raheem & Kazeem B. Ajide, 2021. "The journey towards dollarization: the role of the tourism industry," Current Issues in Tourism, Taylor & Francis Journals, vol. 24(22), pages 3182-3188, November.
    • Handle: RePEc:taf:rcitxx:v:24:y:2021:i:22:p:3182-3188
    DOI: 10.1080/13683500.2020.1863929
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    More about this item

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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