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Assessment of Tourism-Led Growth Risks in Resource-Rich Countries: Evidence from Azerbaijan

Author

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  • Huseyn Arzu

    (1 Department of Management, Azerbaijan Tourism and Management University, Baku, Azerbaijan)

Abstract

The COVID-19 pandemic has provided important lessons in determining future development strategies for countries whose economies are largely dependent on natural resources. The following study was conducted to analyze the potential for tourism to contribute to economic growth and sustainability of economic development in countries rich in natural resources during the post-resource period. Using data from the Republic of Azerbaijan, a co-integrated regression model was used in the analyses. Findings showed that (1) tourism has a positive effect on economic growth and can play a role in ensuring its sustainability; (2) a decrease in revenues from tourism carries more risk for the economy than revenues from oil (coefficient of variation); (3) if an oil and gas country chooses a tourism-based development path in the post-oil and gas era, it may face very serious challenges (due to the fact that tourism sector is highly vulnerable to direct and indirect events); (4) dominance of the tourism sector in the economy carries more risk than dominance of the oil and gas sector.

Suggested Citation

  • Huseyn Arzu, 2023. "Assessment of Tourism-Led Growth Risks in Resource-Rich Countries: Evidence from Azerbaijan," Economics, Sciendo, vol. 11(2), pages 137-152, December.
    • Handle: RePEc:vrs:econom:v:11:y:2023:i:2:p:137-152:n:10
    DOI: 10.2478/eoik-2023-0053
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    More about this item

    Keywords

    Azerbaijan; economic growth; tourism income; regression model; coefficient of variation; non-oil sector;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F19 - International Economics - - Trade - - - Other
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • Z32 - Other Special Topics - - Tourism Economics - - - Tourism and Development

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