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The relationship between tourism, foreign direct investment and economic growth: evidence from Iran

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  • Soheila Khoshnevis Yazdi
  • Khadijeh Homa Salehi
  • Mahshid Soheilzad

Abstract

Tourism is one of the world's largest industries and an increasingly important source of foreign currency that is used to finance economic growth. The purpose of this study is to examine the long-term and short-term relationships between tourism and economic growth in Iran, by using annual data covering the 1985–2013 period and autoregressive distributed lag and the Error Correction model to examine the relationships between variables. The findings showed that there is a positive relationship between tourism expenditure and economic growth in the long term and short term. The result indicate that there is also positive relationship between the real effective exchange rate (REER), foreign direct investment (FDI) and economic growth. The Granger causality test shows a bidirectional causality running between tourism expenditure and economic growth.

Suggested Citation

  • Soheila Khoshnevis Yazdi & Khadijeh Homa Salehi & Mahshid Soheilzad, 2017. "The relationship between tourism, foreign direct investment and economic growth: evidence from Iran," Current Issues in Tourism, Taylor & Francis Journals, vol. 20(1), pages 15-26, January.
    • Handle: RePEc:taf:rcitxx:v:20:y:2017:i:1:p:15-26
    DOI: 10.1080/13683500.2015.1046820
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    Cited by:

    1. Oluwatosin Adeniyi & Terver T Kumeka & Samuel Orekoya & Wasiu Adekunle, 2023. "Impact of tourism development on inclusive growth: A panel vector autoregression analysis for African economies," Tourism Economics, , vol. 29(3), pages 612-642, May.
    2. Joey Pek U Sou & Thea Vinnicombe, 2023. "Does governance quality matter for FDI-led tourism development? A supply-side perspective," Tourism Economics, , vol. 29(2), pages 392-408, March.
    3. Muhammad Amin Hasan & Mr. Abdullah & Muhammad Arsalan Hashmi & Ali Sajid, 2022. "International Remittances and International Tourism Development in South Asia: The Moderating Role of Political Stability," Journal of Economic Impact, Science Impact Publishers, vol. 4(3), pages 177-187.

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