IDEAS home Printed from https://ideas.repec.org/p/uza/wpaper/28345.html
   My bibliography  Save this paper

Does international tourism spur international trade in SSA countries? A dynamic panel data analysis

Author

Listed:
  • Odhiambo, Nicholas M
  • Saungweme, Talknice

Abstract

In this study, the relationship between tourism development and trade in 12 sub-Saharan African (SSA) countries is examined during the period 1995-2019. Three proxies of trade are used, namely the total trade, total exports, and total imports of goods and services to examine this linkage, thereby leading to three separate model specifications. A wide range of modern econometric techniques were also employed to examine the relationship between the various proxies of trade and tourist arrivals. These include i) cross-sectional dependence tests based on Breusch-Pagan (1980) LM, Pesaran (2004) scaled LM, Baltagi et al. (2012) bias-corrected scaled LM, and Pesaran (2004) CD; ii) a slope homogeneity test based on Pesaran and Yamagata (2008); iii) an ECM panel cointegration test based on Westerlund (2007); and iv) a heterogeneous panel causality model based on Dumitrescu and Hurlin (2012), among others. Using the dynamic ordinary least squares (DOLS) and the fully modified ordinary least squares (FMOLS), the study found that, overall, international tourism has a positive and significant impact on trade in SSA countries. This finding is also corroborated by the heterogeneous Granger causality test, which found a distinct unidirectional causal flow from international tourism arrivals to trade. The study, therefore, recommends that SSA countries should implement policies aimed at promoting international tourism in order to increase their international trade and boost their overall trade balance.

Suggested Citation

  • Odhiambo, Nicholas M & Saungweme, Talknice, 2021. "Does international tourism spur international trade in SSA countries? A dynamic panel data analysis," Working Papers 28345, University of South Africa, Department of Economics.
    • Handle: RePEc:uza:wpaper:28345
    as

    Download full text from publisher

    File URL: http://uir.unisa.ac.za/bitstream/handle/10500/28345/Does%20international%20tourism%20spur%20intrnational%20trade%20in%20SSA%20countries%20A%20dynamic%20panel%20data%20analysis.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Asongu, Simplice & Acha-Anyi, Paul, 2019. "Global Tourism and Waves of Terror: Perspectives from Military Expenditure," MPRA Paper 101793, University Library of Munich, Germany.
    2. Baltagi, Badi H. & Feng, Qu & Kao, Chihwa, 2012. "A Lagrange Multiplier test for cross-sectional dependence in a fixed effects panel data model," Journal of Econometrics, Elsevier, vol. 170(1), pages 164-177.
    3. Sheilla Nyasha & Nicholas M. Odhiambo & Simplice A. Asongu, 2021. "The Impact of Tourism Development on Economic Growth in Sub-Saharan Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(6), pages 1514-1535, December.
    4. Simplice A. Asongu & Joseph I. Uduji & Elda N. Okolo-Obasi, 2019. "Tourism and insecurity in the world," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(4), pages 453-472, December.
    5. K. G. Suresh & Aviral Kumar Tiwari, 2018. "Does international tourism affect international trade and economic growth? The Indian experience," Empirical Economics, Springer, vol. 54(3), pages 945-957, May.
    6. Pedroni, Peter, 2004. "Panel Cointegration: Asymptotic And Finite Sample Properties Of Pooled Time Series Tests With An Application To The Ppp Hypothesis," Econometric Theory, Cambridge University Press, vol. 20(3), pages 597-625, June.
    7. Dumitrescu, Elena-Ivona & Hurlin, Christophe, 2012. "Testing for Granger non-causality in heterogeneous panels," Economic Modelling, Elsevier, vol. 29(4), pages 1450-1460.
    8. Damiaan Persyn & Joakim Westerlund, 2008. "Error-correction–based cointegration tests for panel data," Stata Journal, StataCorp LP, vol. 8(2), pages 232-241, June.
    9. Alessandro Bellocchi & Edgar J. Sanchez Carrera & Giuseppe Travaglini, 2021. "What drives TFP long-run dynamics in five large European economies?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(2), pages 569-595, July.
    10. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    11. Denise Fry & Andrea Saayman & Melville Saayman, 2010. "The Relationship Between Tourism And Trade In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 78(3), pages 287-306, September.
    12. Korede Ajogbeje & Oluwatosin Adeniyi & Oludele Folarin, 2017. "The effect of terrorism on tourism development in Nigeria," Tourism Economics, , vol. 23(8), pages 1673-1678, December.
    13. Odhiambo, Nicholas M & Nyasha, Sheilla, 2020. "Is tourism a spur to economic growth in South Africa: An empirical investigation," Working Papers 26731, University of South Africa, Department of Economics.
    14. Nuno Carlos LEITÃO, 2010. "Does Trade Help to Explain Tourism Demand? The Case of Portugal," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 3(3(544)), pages 63-74, March.
    15. Simplice Asongu & Nicholas M. Odhiambo, 2019. "Tourism and social media in the world: an empirical investigation," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(7), pages 1319-1331, November.
    16. Ceyhun Can OZCAN, 2016. "International trade and tourism for Mediterranean countries: A panel causality analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(606), S), pages 203-212, Spring.
    17. Mukesh Kumar & Sanjeev Prashar & RK Jana, 2019. "Does international tourism spur international trade and output? Evidence from wavelet analysis," Tourism Economics, , vol. 25(1), pages 22-33, February.
    18. Nicholas M. Odhiambo, 2011. "Growth, Employment and Poverty in South Africa: In Search of a Trickle-Down Effect," Journal of Income Distribution, Ad libros publications inc., vol. 20(1), pages 49-62, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nicholas M. Odhiambo & Talknice Saungweme, "undated". "Does International Tourism Spur International Trade In Ssa Countries? A Dynamic Panel Data Analysis," Working Papers AESRI07, African Economic and Social Research Institute (AESRI).
    2. Odhiambo, Nicholas M & Saungweme, Talknice, 2021. "Does international tourism spur international trade in SSA countries? A dynamic panel data analysis," Working Papers 28345, University of South Africa, Department of Economics.
    3. N.M. Odhiambo & T. Saungweme, 2021. "Does International Tourism Spur International Trade in SSA Countries? A Dynamic Panel Data Analysis," Working Papers AESRI-2021-08, African Economic and Social Research Institute (AESRI), revised Nov 2021.
    4. Nicholas M. Odhiambo & Talknice Saungweme, "undated". "Does International Tourism Spur International Trade in SSA Countries? A Dynamic Panel Data Analysis," Working Papers AESRIWP08, African Economic and Social Research Institute (AESRI).
    5. Salah Eddine SARI HASSOUN & Abdelkader SAHED & Khayereddine Salim ADDA & Asma Hadjira SEBBANE, 2020. "Not a long ago, the agriculture sector was the main pillar of any economy in the world. It not only provides food production, but it participates to the expansion of the economic growth as well. In th," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(623), S), pages 301-324, Summer.
    6. Iheonu O Chimere & Tochukwu Nwachukwu, 2020. "Macroeconomic determinants of household consumption in selected West African countries," Economics Bulletin, AccessEcon, vol. 40(2), pages 1596-1606.
    7. Usman, Muhammad & Makhdum, Muhammad Sohail Amjad, 2021. "What abates ecological footprint in BRICS-T region? Exploring the influence of renewable energy, non-renewable energy, agriculture, forest area and financial development," Renewable Energy, Elsevier, vol. 179(C), pages 12-28.
    8. Shobande, Olatunji A. & Asongu, Simplice A., 2022. "The Critical Role of Education and ICT in Promoting Environmental Sustainability in Eastern and Southern Africa: A Panel VAR Approach," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    9. Angeliki N. Menegaki, 2019. "The ARDL Method in the Energy-Growth Nexus Field; Best Implementation Strategies," Economies, MDPI, vol. 7(4), pages 1-16, October.
    10. Nicholas M. Odhiambo, 2022. "Does Foreign Direct Investment Spur Economic Growth? New Empirical Evidence From Sub-Saharan African Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(233), pages 61-84, April – J.
    11. Gordon L. Brady & Cosimo Magazzino, 2018. "Fiscal Sustainability in the EU," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 46(3), pages 297-311, September.
    12. Khanna, Rupika & Sharma, Chandan, 2021. "Does infrastructure stimulate total factor productivity? A dynamic heterogeneous panel analysis for Indian manufacturing industries," The Quarterly Review of Economics and Finance, Elsevier, vol. 79(C), pages 59-73.
    13. Mohammad Mafizur Rahman & Istihak Rayhan & Nahid Sultana, 2023. "How Does Electricity Affect Economic Growth? Examining the Role of Government Policy to Selected Four South Asian Countries," Energies, MDPI, vol. 16(3), pages 1-17, February.
    14. Le, Thai-Ha & Nguyen, Canh Phuc, 2019. "Is energy security a driver for economic growth? Evidence from a global sample," Energy Policy, Elsevier, vol. 129(C), pages 436-451.
    15. Muhammad Azam & Zia Ur Rehman & Yusnidah Ibrahim, 2022. "Causal nexus in industrialization, urbanization, trade openness, and carbon emissions: empirical evidence from OPEC economies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 13990-14010, December.
    16. Jean-François Hoarau & Nicolas Lucic, 2022. "Are real merchandise imports per capita a good predictor for the standard of living for the small island world: Testing for the imports-led growth and the growth-led imports hypotheses in panels over ," TEPP Working Paper 2022-16, TEPP.
    17. Zahed Ghaderi & Behnaz Saboori & Mana Khoshkam, 2023. "Revisiting the Environmental Kuznets Curve Hypothesis in the MENA Region: The Roles of International Tourist Arrivals, Energy Consumption and Trade Openness," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    18. Mohammed Musah & Yusheng Kong & Isaac Adjei Mensah & Stephen Kwadwo Antwi & Mary Donkor, 2021. "The connection between urbanization and carbon emissions: a panel evidence from West Africa," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 11525-11552, August.
    19. Gorus, Muhammed Sehid & Aslan, Murat, 2019. "Impacts of economic indicators on environmental degradation: Evidence from MENA countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 259-268.
    20. Shrestha, Santosh & Kotani, Koji & Kakinaka, Makoto, 2021. "The relationship between trade openness and government resource revenue in resource-dependent countries," Resources Policy, Elsevier, vol. 74(C).

    More about this item

    Keywords

    Tourism; trade openness; Granger-causality; panel analysis; SSA;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uza:wpaper:28345. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shaun Donovan (email available below). General contact details of provider: https://edirc.repec.org/data/deusaza.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.