Tourism and economic growth: Evidence from ASEAN-5 using granger causality test

• Main Authors: Chua, Jefferson G., Dee, Tiffany Mae C., Tiu, Joseh J., Yulo, Katrina May L.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Subjects: Tourism > Asia; Economic development > Asia; Economics
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/11295
• Institution: De La Salle University

Promoting tourism has always been regarded as an important tool in enhancing economic growth with its capacity to increase GDP in the host country. In recent years, many studies have found that long-run causality between tourism and economic growth varies across different countries, whether there is a unidirectional, bidirectional, or no causality in the relationship. Using annual panel data from the year 1995-2011, we conducted Panel Granger analysis, which includes the panel unit root tests, panel cointegration tests, and panel Granger causality to answer our objectives. Our study estimates if there exists a long-run unidirectional, bidirectional, or no causal relationship between tourism activities and economic growth in ASEAN-5 countries. Our empirical findings support both the tourism-led growth hypothesis and the growth-led tourism hypothesis, which means there exists bidirectional causal relationship in ASEAN-5 countries. This signifies that further efforts to strengthen tourism should be pushed. Furthermore, we suggest that the current strategy of the ASEAN Economic Community (AEC) on the tourism sector is successful and can provide a lot more opportunities in the future.