IDEAS home Printed from https://ideas.repec.org/a/alv/journl/v3y2021i1p25-43.html
   My bibliography  Save this article

Long-Run Nexus of Tourism and Economic Growth in Sri Lanka: Empirical Evidence Using Cointegration Analysis

Author

Listed:
  • Kurukulasooriya Nisantha

    (Department of Economics, University of Ruhuna, Matara (Sri Lanka))

  • Lelwala Erandathie

    (Department of Economics, University of Ruhuna, Matara (Sri Lanka))

Abstract

This study investigates the association between economic growth and tourism in Sri Lanka using cointegration analysis for the period 1980 to 2019. The analysis was performed using the Augmented Dickey-Fuller test, Phillips-Perron test, Engle-Granger cointegration, and Granger causality tests. The results revealed a long-run equilibrium relationship among variables while there is a disequilibrium in the short run. The estimated error correction term is theoretically acceptable and approximately 5 per cent yearly correction of its disequilibrium in the short run was found. Granger causality test presented a long-run unidirectional causality which is running from tourism to economic growth and thus findings confirm the tourism-led growth hypothesis in Sri Lanka tourism and development spectrum. Therefore, tourism has a significant positive impact on economic activities in the long run. Findings further emphasize that benefits of the economic development must be transferred to the further development of tourism to maintain a bilateral causality which is an important concept in this regard. It provides the rationale for the further development of productive policy strategies to attract more tourists to the country and upsurge visitor expenditures during their stay in Sri Lanka since Sri Lanka has significantly developed its accommodation capacities. Findings further reveal that the tourism sector must be developed parallel to the economic development to boost the growth through tourism. Therefore, all sectors, the government, private bodies, and voluntary organizations must become active partners in this endeavour, and policy implications need the focus of every aspect of enhancing tourism as a growth engine.

Suggested Citation

  • Kurukulasooriya Nisantha & Lelwala Erandathie, 2021. "Long-Run Nexus of Tourism and Economic Growth in Sri Lanka: Empirical Evidence Using Cointegration Analysis," Management & Economics Research Journal, Faculty of Economics, Commercial and Management Sciences, Ziane Achour University of Djelfa, vol. 3(1), pages 25-43, March.
  • Handle: RePEc:alv:journl:v:3:y:2021:i:1:p:25-43
    DOI: 10.48100/merj.2021.148
    as

    Download full text from publisher

    File URL: https://mer-j.com/merj/index.php/merj/article/view/148
    Download Restriction: no

    File URL: https://libkey.io/10.48100/merj.2021.148?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Tourism; Economic Growth; Empirical Evidence; Sri Lanka;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Z32 - Other Special Topics - - Tourism Economics - - - Tourism and Development

    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:alv:journl:v:3:y:2021:i:1:p:25-43. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chihab Ilimi (email available below). General contact details of provider: https://edirc.repec.org/data/fedjedz.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.