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Air-Transportation, Tourism And Economic Growth Interactions In Sri Lanka: Cointegration And Causality Analysis

Author

Listed:
  • Wasanth Madurapperuma

    (University of Kelaniya, Colombo)

  • Ruwan Higgoda

    (Air Traffic Controller, Bandaranaike International Airport)

Abstract

Air travel growth is one of the notable responsibilities of a government specifically for an economy which depends heavily on tourism. Air travel strengthens destinations by enhancing connectivity, arrivals and other tourism reactions therefore it is recognized as a medium of revenue generation, work opportunity creation and sustainable business development. The aim of this study is to examine the causal relationship between tourism, air travel and economic growth in Sri Lanka for period of 1983-2019. The study employs the Cointegration and Granger causality approach. The results confirm that there is a stable uni directional relationship running from air transportation to economic growth in the short run bidirectional causality exists between air travel and tourism growth in Sri Lanka. The findings suggested that policymakers do not over-rely on air transportation for economic growth and that they pay more comprehensive attention to integrate the air transportation and tourism growth. It recommends policy makers to develop integrated strategies that connect air travel, tourism and economic growth.

Suggested Citation

  • Wasanth Madurapperuma & Ruwan Higgoda, 2020. "Air-Transportation, Tourism And Economic Growth Interactions In Sri Lanka: Cointegration And Causality Analysis," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 8(1), pages 85-107, May.
    • Handle: RePEc:sek:jijobm:v:8:y:2020:i:1:p:85-107
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    References listed on IDEAS

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    2. Dobruszkes, Frédéric & Mondou, Véronique & Ghedira, Aymen, 2016. "Assessing the impacts of aviation liberalisation on tourism: Some methodological considerations derived from the Moroccan and Tunisian cases," Journal of Transport Geography, Elsevier, vol. 50(C), pages 115-127.
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    Cited by:

    1. Rahman, Farzana & Rahman, Md. Mahmudur, 2023. "Analyzing service quality of domestic airlines in an emerging country- Bangladesh by structural equation models," Journal of Air Transport Management, Elsevier, vol. 107(C).
    2. Agata Balińska & Wioletta Olejniczak, 2021. "Experiences of Polish Tourists Traveling for Leisure Purposes during the COVID-19 Pandemic," Sustainability, MDPI, vol. 13(21), pages 1-14, October.
    3. Law, Colin C.H. & Zhang, Yahua & Gow, Jeff & Vu, Xuan-Binh, 2022. "Dynamic relationship between air transport, economic growth and inbound tourism in Cambodia, Laos, Myanmar and Vietnam," Journal of Air Transport Management, Elsevier, vol. 98(C).

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    More about this item

    Keywords

    Air travel; Tourism; Tourist arrivals; Economic growth (GDP); Cointegration; Vector Error Correction Model; Causality;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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