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Tourism and Economic Growth in Jordan: Evidence from Linear and Nonlinear Frameworks

Author

Listed:
  • Buthaina M. A. Muhtaseb

    (Business Economics Department, Business School, The University of Jordan, Jordan,)

  • Hussam-Eldin Daoud

    (Economics, Business and Finance Department, Economic and Business Administration college, Mutah University, Jordan.)

Abstract

This study investigates cointegration and causal effects between tourism and economic growth (EG) in Jordan. We use quarterly data from 1998Q1 to 2015Q4 on real gross domestic product and real international tourism receipts. Two empirical approaches are employed; Engle and Granger (1987) linear cointegration framework, and the nonlinear framework of Enders and Siklos (2001) cointegration test, in addition to Diks and Panchenko (2006) causality test. Empirical findings reveal the presence of a positive long-run relationship between tourism and EG. According to the linear approach there is a unidirectional causality from tourism to growth, thus, supporting the tourism-led growth hypothesis. Whereas, the nonlinear method, which seems to give more appropriate results, suggests a bidirectional causality, hence, confirming the feedback hypothesis that EG and tourism reinforce each other.

Suggested Citation

  • Buthaina M. A. Muhtaseb & Hussam-Eldin Daoud, 2017. "Tourism and Economic Growth in Jordan: Evidence from Linear and Nonlinear Frameworks," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 214-223.
    • Handle: RePEc:eco:journ1:2017-01-28
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    References listed on IDEAS

    as
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    Cited by:

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    2. Nur Feriyanto, 2020. "Economic and Tourism Factors Affecting the Real Gross Regional Domestic Product: A Case Study," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 736-756.

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    More about this item

    Keywords

    Tourism Receipts; Economic Growth; Linear and Nonlinear Frameworks; Jordan;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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