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Tourism: the untapped goldmine in the Gold Coast

Author

Listed:
  • Pat Obi

    (White Lodging School of Tourism & Hospitality Management Purdue University Northwest, Hammond, USA)

  • Robert L. Martin

    (Vaal University of Technology, Vanderbijlpark, South Africa)

  • Greg Chidi Obi

    (Technology & Business Development Center Ohio University-Chillicothe, Chillicothe, USA)

Abstract

Purpose – This study examines the economic impact of international tourism and currency valuation in the West African country of Ghana. Previously known as the Gold Coast due to its vast gold reserves, Ghana is a developing economy with a sharply devalued currency and a heavy reliance on imports.The paper shows that Ghana’s weak currency can be leveraged to boost international tourism and with that, economic growth. This view of tourism-led growth is in part supported by evidence in which tourism receipts are a major source of foreign exchange earnings for a number of developing economies. Methodology – The relationship between economic growth, tourism receipts, and currency valuation is examined using a vector error correction model. This approach offers an opportunity to not only confirm the existence of a dynamic relationship among the time series but also, the existence of causality both in the short- and long-run. Findings – Cointegration tests confirm the existence of a long-run relationship among the variables. Both tourism and exchange rate are found to positively impact economic growth. Also, there is a long-run causality from exchange rate to tourism receipts. Originality – This is the first empirical study that demonstrates the existence of causality between currency valuation and tourism using data from Sub-Saharan Africa, a region with abundant natural resources but one that remains significantly underdeveloped.

Suggested Citation

  • Pat Obi & Robert L. Martin & Greg Chidi Obi, 2016. "Tourism: the untapped goldmine in the Gold Coast," Tourism and Hospitality Management, University of Rijeka, Faculty of Tourism and Hospitality Management, vol. 22(1), pages 17-28, May.
    • Handle: RePEc:tho:journl:v:22:y:2016:n:1:p:17-28
    DOI: 10.20867/thm.22.1.7
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    References listed on IDEAS

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    Cited by:

    1. Pat Obi & Godwin-Charles Ogbeide, 2022. "The Mediating Effects of Implied Volatility and Exchange Rate on the U.S. Tourism-Growth Nexus," JRFM, MDPI, vol. 15(3), pages 1-16, February.
    2. Francis Baidoo & Elikplimi Komla Agbloyor & Vera Ogeh Lassey Fiador & Nana Amaniampong Marfo, 2022. "Do countries’ geographical locations moderate the tourism-led economic growth nexus in sub-Saharan Africa?," Tourism Economics, , vol. 28(4), pages 1009-1039, June.
    3. Mensah, Lord & Obi, Pat & Bokpin, Godfred, 2017. "Cointegration test of oil price and us dollar exchange rates for some oil dependent economies," Research in International Business and Finance, Elsevier, vol. 42(C), pages 304-311.

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    More about this item

    Keywords

    Tourism; Ghana; Exchange rate; Error correction; Granger causality;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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