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Tourism-led Growth Hypothesis in the Top Ten Tourist Destinations: New Evidence Using the Quantile-on-Quantile Approach

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  • Shahzad, Syed Jawad Hussain
  • Shahbaz, Muhammad
  • Ferrer, Román
  • Kumar, Ronald Ravinesh

Abstract

This paper examines the empirical validity of the tourism-led growth hypothesis in the top ten tourist destinations in the world (China, France, Germany, Italy, Mexico, Russia, Spain, Turkey, the United Kingdom, and the United States) using the quantile-on-quantile (QQ) approach and a new index of tourism activity that combines the most commonly used tourism indicators. This methodology, recently introduced by Sim and Zhou (2015), provides an ideal framework with which to capture the overall dependence structure between tourism development and economic growth. The empirical results primarily show a positive relation between tourism and economic growth for the ten countries considered with substantial variations across countries and across quantiles within each country. The weakest links are noted for China and Germany, possibly because of the limited importance of the tourism sector relative to other major economic activities in those countries. Important country-specific policy implications may be drawn from these findings.

Suggested Citation

  • Shahzad, Syed Jawad Hussain & Shahbaz, Muhammad & Ferrer, Román & Kumar, Ronald Ravinesh, 2016. "Tourism-led Growth Hypothesis in the Top Ten Tourist Destinations: New Evidence Using the Quantile-on-Quantile Approach," MPRA Paper 75540, University Library of Munich, Germany, revised 10 Dec 2016.
    • Handle: RePEc:pra:mprapa:75540
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    More about this item

    Keywords

    tourism; economic growth; tourism-led growth hypothesis; real GDP per capita; quantile-on-quantile (QQ) approach;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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