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Risk, uncertainty and the tourism sector of North Africa

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  • Khandokar Istiak

Abstract

This paper investigates, for the first time, the uncertainty on the tourism of North Africa and uncertainty on the second‐degree effects of the North African tourism sector. The study uses data from 1995 to 2019 and a structural vector autoregression to perform the investigation. The research finds that uncertainties, measured by the uncertainty of Europe, the uncertainty of the Middle East and Central Asia, and the volatility of GDP growth of the Euro area, have significant negative effects on investment and job creation in, as well as the contribution to the GDP of, the North African tourism sector. The paper invents a new proxy of risk, measured by the volatility of crude oil production in North Africa, and finds that this new risk measure has a significant negative impact on the North African tourism sector. The results show that geopolitical risk and the uncertainty of Africa do not significantly affect the North African tourism sector. The paper suggests that policymakers in North Africa subsidize tourism‐related activities and explore new markets to attract tourists during periods of high risk and uncertainty.

Suggested Citation

  • Khandokar Istiak, 2021. "Risk, uncertainty and the tourism sector of North Africa," African Development Review, African Development Bank, vol. 33(2), pages 329-342, June.
    • Handle: RePEc:bla:afrdev:v:33:y:2021:i:2:p:329-342
    DOI: 10.1111/1467-8268.12574
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    References listed on IDEAS

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    Cited by:

    1. Feuerbacher, Arndt & Flaig, Dorothee, 2025. "Tourism in Africa and economic vulnerabilities to exogenous shocks," Economic Modelling, Elsevier, vol. 152(C).
    2. Khandokar Istiak, 2023. "Psychological factors of Canadian and Mexican tourists and the US tourism sector," Tourism Economics, , vol. 29(5), pages 1328-1354, August.

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