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The role of tourism toward economic growth in the local economy

Author

Listed:
  • Suhel
  • Abdul Bashir

    (Department of Development Economics, Universitas Sriwijaya, Indonesia
    Department of Development Economics, Universitas Sriwijaya, Indonesia)

Abstract

This study analyzes the relationship between the number of tourists, tourism investment, government tourism spending, and economic growth in South Sumatra. It uses Granger causality model and simultaneous equation model to estimate the empirical model. The findings show that the number of tourists, the added value of the tourism sector, and the tourism spending of the tourism sector affect economic growth, while tourism investment does not affect the economic growth. In the second model, this study found that economic growth, tourism added value, tourism, and government tourism spending affect the number of tourists. This study implies that government policy has an important role in encouraging the tourism sector development which is indicated the contribution this sector on economic growth.

Suggested Citation

  • Suhel & Abdul Bashir, 2018. "The role of tourism toward economic growth in the local economy," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 10(1), pages 32-39, April.
    • Handle: RePEc:uii:journl:v:10:y:2018:i:1:p:32-39
    DOI: 10.20885/ejem.vol10.iss1.art4
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    References listed on IDEAS

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    2. Jun Zhang & Li Cheng, 2019. "Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China," Sustainability, MDPI, vol. 11(2), pages 1-22, January.
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    More about this item

    Keywords

    tourists; investment of tourism; government spending of tourism; and economic growth.;
    All these keywords.

    JEL classification:

    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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