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Tourism development and economic growth: a panel Granger causality analysis in the frequency domain

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  • Mahmut Bilen
  • Veli Yilanci
  • Hakan Eryüzlü

Abstract

In this paper, we test the causal relationship between economic growth and tourism development in the 1995–2012 period using recently developed panel Granger causality tests that allow for country-level heterogeneity, thus leading to more accurate results for the 12 Mediterranean countries. Although results of the Dumitrescu and Hurlin [(2012) testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450–1460] panel Granger causality test show a unidirectional causality from tourism development to economic growth, results of the Croux and Reusens [(2013). Do stock prices contain predictive power for the future economic activity? A Granger causality analysis in the frequency domain. Journal of Macroeconomics, 35, 93–103] panel Granger causality analysis in the frequency domain show that there is a bidirectional temporary and permanent causality between tourism development and economic growth. The bidirectional causality relationship between tourism development and economic growth, which is the main finding of this study, suggests that in order to achieve high economic growth, policy-makers should focus on developing the tourism sector.

Suggested Citation

  • Mahmut Bilen & Veli Yilanci & Hakan Eryüzlü, 2017. "Tourism development and economic growth: a panel Granger causality analysis in the frequency domain," Current Issues in Tourism, Taylor & Francis Journals, vol. 20(1), pages 27-32, January.
    • Handle: RePEc:taf:rcitxx:v:20:y:2017:i:1:p:27-32
    DOI: 10.1080/13683500.2015.1073231
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    Cited by:

    1. Garrod Brian & Almeida António & Machado Luiz, 2023. "Modelling of nonlinear asymmetric effects of changes in tourism on economic growth in an autonomous small-island economy," European Journal of Tourism, Hospitality and Recreation, Sciendo, vol. 13(2), pages 154-172, December.
    2. Uktam Umurzakov & Shakhnoza Tosheva & Raufhon Salahodjaev, 2023. "Tourism and Sustainable Economic Development: Evidence from Belt and Road Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 503-516, March.
    3. Nikeel Nishkar Kumar & Arvind Patel & Sean Kimpton & Antony Andrews, 2022. "Asymmetric reactions in the tourism‐led growth hypothesis," Australian Economic Papers, Wiley Blackwell, vol. 61(4), pages 661-677, December.
    4. Lamia Jamel, 2020. "The Relation between Tourism and Economic Growth: A Case of Saudi Arabia as an Emerging Tourism Destination," Virtual Economics, The London Academy of Science and Business, vol. 3(4), pages 29-47, October.

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