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The Journey towards Dollarization: The Role of the Tourism Industry

Author

Listed:
  • Ibrahim D. Raheem

    (ILMA University, Karachi, Pakistan)

  • Kazeem B. Ajide

    (University of Lagos, Lagos, Nigeria)

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. 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. This result is 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," Research Africa Network Working Papers 21/008, Research Africa Network (RAN).
    • Handle: RePEc:abh:wpaper:21/008
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    References listed on IDEAS

    as
    1. Raheem, Ibrahim Dolapo & Asongu, Simplice A., 2018. "Extending the determinants of dollarization in sub-Saharan Africa: The role of easy access to foreign exchange earnings," Research in International Business and Finance, Elsevier, vol. 45(C), pages 106-120.
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    More about this item

    Keywords

    Dollarization; Tourism; Sub-saharan Africa;
    All these keywords.

    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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