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Exploring the nexus between tourism, remittances and growth in Kenya

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  • Ronald Kumar

Abstract

Recently there has been a surge in remittances inflow to Kenya while tourism receipts appears to be declining, albeit gradually. In light of these developments, the paper explores the plausible effects of tourism and remittances on per worker output. We use the annual data over 1978–2010 periods and the ARDL bounds approach within the augmented (Solow in Q J Econ 70:65–94, 1956 ) framework. The regression results show that tourism has a marginal net negative effect in the short-run however positive effect in the long-run. Remittances, on the other hand, have a net positive effect in short-run and negative effect in the long-run. The key results from the Toda–Yamamoto Granger non-causality (Toda and Yamamoto in J Econom 66:225–250, 1995 ) results show a unidirectional causation from remittances to output per worker; and from output per worker to tourism. A unidirectional ‘combined effect’ of all variables causing output and remittances, respectively are evident as well. Conclusively, tourism is one of the leading drivers of Kenyan economy. To boost gains from tourism, the sector needs to align policies to the Kenya 2030 strategic framework with significant focus on expanding markets, boosting investment, and growth. Remittances market need to be further developed strategically with the view to improving Kenyan migrant led growth initiatives with plausible links to tourism development. Copyright Springer Science+Business Media Dordrecht 2014

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  • Ronald Kumar, 2014. "Exploring the nexus between tourism, remittances and growth in Kenya," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1573-1588, May.
  • Handle: RePEc:spr:qualqt:v:48:y:2014:i:3:p:1573-1588
    DOI: 10.1007/s11135-013-9853-1
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    2. Mora-Rivera, Jorge & Cerón-Monroy, Hazael & García-Mora, Fernando, 2019. "The impact of remittances on domestic tourism in Mexico," Annals of Tourism Research, Elsevier, vol. 76(C), pages 36-52.
    3. Nikeel Kumar & Ronald Ravinesh Kumar & Radika Kumar & Peter Josef Stauvermann, 2020. "Is the tourism–growth relationship asymmetric in the Cook Islands? Evidence from NARDL cointegration and causality tests," Tourism Economics, , vol. 26(4), pages 658-681, June.
    4. Anupam Das & Adian McFarlane & Luc Carels, 2021. "Empirical exploration of remittances and renewable energy consumption in Bangladesh," Asia-Pacific Journal of Regional Science, Springer, vol. 5(1), pages 65-89, February.
    5. Ann-Ni Soh & Chin-Hong Puah & Meng-Chang Jong, 2022. "Macroeconomic Determinants of Tourism Demand in Malaysia: A Markov Switching Regression Approach," Business Management and Strategy, Macrothink Institute, vol. 13(2), pages 95-107, December.
    6. Daniel Francois Meyer, 2018. "An Analysis of the Impact of Economic Growth, Political Instability and Exchange Rate on Tourism Growth in South Africa," Proceedings of the 11th International RAIS Conference, November 19-20, 2018 04DM, Research Association for Interdisciplinary Studies.
    7. Huseyin KARAMELIKLI & Yılmaz BAYAR, 2015. "REMITTANCES AND ECONOMIC GROWTH IN TURKEY Abstract : Savings are one of the important determinants beyond the theories of economic growth. Therefore remittances and foreign direct investment inflows h," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 4(2), pages 1-2, july.
    8. Ronald Ravinesh Kumar & Peter Josef Stauvermann & Arvind Patel & Nikeel Kumar & Selvin Prasad, 2016. "Exploring the Nexus Between Tourism and Output in Cook Islands: An ARDL Bounds Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(3), pages 1085-1101, September.
    9. Ronald Kumar, 2014. "Exploring the role of technology, tourism and financial development: an empirical study of Vietnam," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2881-2898, September.
    10. Canh Phuc Nguyen & Su Dinh Thanh & Bach Nguyen, 2022. "Economic uncertainty and tourism consumption," Tourism Economics, , vol. 28(4), pages 920-941, June.
    11. Shahbaz, Muhammad & Kumar, Ronald Ravinesh & Ivanov, Stanislav & Loganathan, Nanthakumar, 2015. "Nexus between Tourism demand and output per capita with relative importance of trade and financial development: A study of Malaysia," MPRA Paper 67226, University Library of Munich, Germany, revised 11 Oct 2015.
    12. Vishwas Gupta, 2016. "Indian reality tourism - a critical perspective," Tourism and Hospitality Management, University of Rijeka, Faculty of Tourism and Hospitality Management, vol. 22(2), pages 111-133, December.
    13. Makun, Keshmeer & Jayaraman, TK, 2022. "Tourism and Economic Growth in South Asian Countries: Asymmetric Analysis and Lessons for Mitigating the Adverse Effects of Covid-19 Pandemic," MPRA Paper 111377, University Library of Munich, Germany.
    14. Nahed Zghidi & Imen Mohamed Sghaier & Zouheir Abida, 2018. "Remittances, Institutions, and Economic Growth in North African Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 804-821, September.
    15. Chantha Hor & Pheara Pheang, 2017. "Analysis Determinant Factors Effect on Migrant Workers' Remittances Flow to the CLMV Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 202-207.
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    18. David B. Audretsch & Antje Fiedler, 2022. "The Vietnamese entrepreneurship paradox: how can entrepreneurs thrive without political and economic freedom?," The Journal of Technology Transfer, Springer, vol. 47(4), pages 1179-1197, August.
    19. Sahoo, Manoranjan & Nayak, Pragyan Parimita & Hanhaga, Manindra & Swain, Kiranbala & Mallick, Rajat Kumar, 2023. "Exploring the asymmetric effect of remittance inflows on gold import demand: Evidence from a large gold-consuming and remittance-receiving country," Resources Policy, Elsevier, vol. 85(PB).
    20. Muhammad Shahbaz & Ronald Ravinesh Kumar & Stanislav Ivanov & Nanthakumar Loganathan, 2017. "The nexus between tourism demand and output per capita with the relative importance of trade openness and financial development," Tourism Economics, , vol. 23(1), pages 168-186, February.
    21. Stauvermann, Peter Josef & Kumar, Ronald Ravinesh, 2017. "Productivity growth and income in the tourism sector: Role of tourism demand and human capital investment," Tourism Management, Elsevier, vol. 61(C), pages 426-433.
    22. Annie Tubadji & Peter Nijkamp, 2018. "Revisiting the Balassa–Samuelson effect: International tourism and cultural proximity," Tourism Economics, , vol. 24(8), pages 915-944, December.
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    24. David Alaminos & Ana León-Gómez & José Ramón Sánchez-Serrano, 2020. "A DSGE-VAR Analysis for Tourism Development and Sustainable Economic Growth," Sustainability, MDPI, vol. 12(9), pages 1-22, May.
    25. Canh P Nguyen, 2023. "Last chance to travel or safety first? The influence of exposure to natural hazards and coping capacities on tourism consumption," Tourism Economics, , vol. 29(4), pages 952-985, June.

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