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Tourism led economic growth in India: an application of vector error correction model


  • Tushinder Preet Kaur
  • Pooja Kansra


Tourism promotes economic growth in a significant manner. The importance of tourism to economic growth has been widely recognised due to its contribution to employment, balance of payment, gross domestic product (GDP), etc. In the present paper an effort has been made to examine the link between the economic growth, investment and net exports from tourism sector by employing the technique of co-integration and VECM. The resulting co-integrating vectors indicate that there exists a long run relationship between GDP, investment in tourism sector, net exports from tourism and employment generation. Thus, it is one of the important factors affecting the economic growth in India with significant multiplier effect.

Suggested Citation

  • Tushinder Preet Kaur & Pooja Kansra, 2018. "Tourism led economic growth in India: an application of vector error correction model," International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 21(4), pages 517-530.
  • Handle: RePEc:ids:ijbglo:v:21:y:2018:i:4:p:517-530

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