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Tourism Activity as an Engine of Growth: Lessons Learned from the European Union

Author

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  • Velisaria Matzana

    (School of Social Sciences, Hellenic Open University, 263 35 Patra, Greece)

  • Aikaterina Oikonomou

    (Department of International and European Studies, University of Piraeus, 185 34 Piraeus, Greece)

  • Michael Polemis

    (School of Social Sciences, Hellenic Open University, 263 35 Patra, Greece
    Department of Economics, University of Piraeus, 185 34 Piraeus, Greece
    Hellenic Competition Commission, 104 34 Athens, Greece)

Abstract

In this study, the linkage between tourism activity and economic development in 21 European countries is analyzed. The data are collected on an annual basis and cover the years from 1995 to 2017. The main purpose is to investigate empirically if there is a long-run connection between tourism activity and the development of the economy by applying a multivariate model. For this purpose, generalized method of moments (GMM) and Granger causality tests are applied within a panel data framework. The results reveal that tourism contributes significantly to European countries’ economic growth. Furthermore, Granger causality analysis shows a unidirectional relationship between tourism and economic development, leading to sufficient evidence for the validity of the tourism-led-growth hypothesis. Therefore, for these European countries, the tourism–led growth hypothesis is supported (meeting our expectations).

Suggested Citation

  • Velisaria Matzana & Aikaterina Oikonomou & Michael Polemis, 2022. "Tourism Activity as an Engine of Growth: Lessons Learned from the European Union," JRFM, MDPI, vol. 15(4), pages 1-15, April.
    • Handle: RePEc:gam:jjrfmx:v:15:y:2022:i:4:p:177-:d:791342
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    References listed on IDEAS

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    2. Avishek Khanal & Mohammad Mafizur Rahman & Rasheda Khanam & Eswaran Velayutham, 2022. "Exploring the Impact of Air Transport on Economic Growth: New Evidence from Australia," Sustainability, MDPI, vol. 14(18), pages 1-17, September.
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    4. Ján Derco, 2022. "The Impacts of the COVID-19 Pandemic on the Tour Operator Market—The Case of Slovakia," JRFM, MDPI, vol. 15(10), pages 1-8, October.

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