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Foreign direct investment and tourism in SIDS: evidence from panel causality tests

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  • Moore, Winston
  • CRAIGWELL, ROLAND

Abstract

This study applies panel causality methods to investigate the relationship between foreign direct investment (FDI) and tourism in Small Island Developing States (SIDS). The results of the homogenous and instantaneous causality tests suggest that there is a bi-directional causal relationship between the variables. However, this causality is not homogenous for the group of countries. Indeed, heterogeneous causality procedures indicate that there exists a bi-directional causal relationship for only a small set of countries. For the most part, the causal relationship runs from FDI to tourism, implying that FDI provides much needed capacity for SIDS and therefore allows these countries to expand their tourism product.

Suggested Citation

  • Moore, Winston & CRAIGWELL, ROLAND, 2008. "Foreign direct investment and tourism in SIDS: evidence from panel causality tests," MPRA Paper 33438, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:33438
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    References listed on IDEAS

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    Cited by:

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    2. Roland Craigwell & Allan Wright, 2011. "Foreign direct investment and corruption in developing economies: Evidence from linear and non-linear panel Granger causality tests," Economics Bulletin, AccessEcon, vol. 31(3), pages 2272-2283.
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    5. Maja Nikšić Radić & Daniel Dragičević & Marina Barkiđija Sotošek, 2019. "Causality between Terrorism and FDI in Tourism: Evidence from Panel Data," Economies, MDPI, vol. 7(2), pages 1-19, May.
    6. Ronald Ravinesh Kumar & Peter Josef Stauvermann, 2023. "Tourism and economic growth in the Pacific region: evidence from five small island economies," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 28(3), pages 894-921, July.
    7. Nasser A. Alkathiri & Mohammad Soliman, 2022. "Examining foreign direct investment determinants of tourism industry in Oman and Egypt: The moderating role of investment environment," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4722-4740, October.
    8. Ayhan Tecel & Salih Katircioğlu & Elham Taheri & Festus Victor Bekun, 2020. "Causal interactions among tourism, foreign direct investment, domestic credits, and economic growth: evidence from selected Mediterranean countries," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 19(3), pages 195-212, September.
    9. Faris Alshubiri & Syed Ahsan Jamil & Samia Fekir, 2024. "Corruption Control, Government Effectiveness and Banking Stability: Does Corruption Grease or Sand the Wheels?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2656-2681, March.
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    More about this item

    Keywords

    Tourism; FDI; Panel causality tests;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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