Foreign direct investment and tourism in SIDS: evidence from panel causality tests
AbstractThis study applies panel causality methods to investigate the relationship between foreign direct investment (FDI) and tourism in Small Island Developing States (SIDS). The results of the homogenous and instantaneous causality tests suggest that there is a bi-directional causal relationship between the variables. However, this causality is not homogenous for the group of countries. Indeed, heterogeneous causality procedures indicate that there exists a bi-directional causal relationship for only a small set of countries. For the most part, the causal relationship runs from FDI to tourism, implying that FDI provides much needed capacity for SIDS and therefore allows these countries to expand their tourism product.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33438.
Date of creation: 2008
Date of revision:
Publication status: Published in Tourism Analysis 4.13(2008): pp. 427-432
Tourism; FDI; Panel causality tests;
Find related papers by JEL classification:
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
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