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The role of tourism toward economic growth in the local economy

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  • Suhel Suhel
  • Abdul Bashir

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 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.
    • Handle: RePEc:uii:journl:v:10:y:2018:i:1:p:32-39:id:7714
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    File URL: https://journal.uii.ac.id/JEP/article/view/7714/8073
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    Cited by:

    1. Ida Bagus Made Sutrisna & Ida Ayu Nyoman Saskara & Made Suyana Utama & Ni Putu Wiwin Setyari, 2020. "Prospective Analysis of Sustainable Tourism Development in Penglipuran Village as A Tourist Village Role Model in Bali," Technium Social Sciences Journal, Technium Science, vol. 13(1), pages 184-198, November.
    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.
    3. Adeola, Ogechi & Evans, Olaniyi & Hilson, Ebo, 2018. "Tourism and economic wellbeing in Africa," MPRA Paper 93685, University Library of Munich, Germany.
    4. Olena STRYZHAK & Ramazan SAYAR & Yılmaz Onur ARI, 2022. "Geopolitical risks, GDP and tourism: an ARDL-ECM cointegration study on Ukraine," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 14(1), pages 85-113, May.

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