International Tourism and Economic Growth: Exploring the Unexplored for the ASEAN Region

International tourism has helped numerous economies and regions over the years in achieving the objective of long-term sustainable economic growth. The “Association of Southeast Asian Nations (ASEAN)” is the rising hub for international tourism due to its rich history, rich vibrant culture, pleasant weather conditions, and beautiful landscape. However, research evidence about the tourism-growth relationship in the context of ASEAN economies is indeed very scarce. Accordingly, this research paper focuses on the members of the ASEAN region to examine the true influence that international tourism has on economic growth. Relevant econometric technique such as the “Fixed Effects (FEF)” is chosen for analysis based on the Hausman test, “Feasible Generalized Least Squares (FGLS)” is used for robustness, and “Two Stages Least Squares (2SLS)” is employed for tackling the likely endogeneity issue. The results show that international tourism has contributed positively to the economic growth of the ASEAN economies. Similarly, openness to global trade and education have also helped the ASEAN economies in securing long run sustainable economic growth. Lastly, the inflation rate has decelerated the pace of economic growth, while government expenditures have accelerated the pace of economic growth among ASEAN members. Our empirical findings are robust to alternative model specifications and alternative econometric estimations. Therefore, we expect our empirical findings to help the policymakers of the ASEAN economies in developing suitable policy responses regarding the growth performance of their economies through the channel of international tourism.