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Time-varying linkages between tourism receipts and economic growth in South Africa

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  • Mehmet Balcilar
  • Rene頶an Eyden
  • Roula Inglesi-Lotz
  • Rangan Gupta

Abstract

The causal link between tourism receipts and GDP has recently become a major focus in the tourism economics literature. Results obtained in recent studies about the causal link appear to be sensitive with respect to the countries analysed, sample period and methodology employed. Considering the sensitivity of the causal link, we use rolling window and time-varying coefficient estimation methods to analyse the parameter stability and Granger causality based on a vector error correction model (VECM). When applied to South Africa for the period 1960-2011, the findings are as follows: results from the full-sample VECM indicate that there is no Granger causality between tourism receipts and GDP, while the findings from the time-varying coefficients model based on the state-space representation show that tourism receipts have positive-predictive content for GDP for the entire period, with the exception of the period between 1985 and 1990. Full-sample time-varying causality tests show bidirectional strong causality between tourism receipts and GDP.

Suggested Citation

  • Mehmet Balcilar & Rene頶an Eyden & Roula Inglesi-Lotz & Rangan Gupta, 2014. "Time-varying linkages between tourism receipts and economic growth in South Africa," Applied Economics, Taylor & Francis Journals, vol. 46(36), pages 4381-4398, December.
  • Handle: RePEc:taf:applec:v:46:y:2014:i:36:p:4381-4398
    DOI: 10.1080/00036846.2014.957445
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    References listed on IDEAS

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    1. Durbin, James & Koopman, Siem Jan, 2012. "Time Series Analysis by State Space Methods," OUP Catalogue, Oxford University Press, edition 2, number 9780199641178.
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    Cited by:

    1. Hassani, Hossein & Silva, Emmanuel Sirimal & Antonakakis, Nikolaos & Filis, George & Gupta, Rangan, 2017. "Forecasting accuracy evaluation of tourist arrivals," Annals of Tourism Research, Elsevier, vol. 63(C), pages 112-127.
    2. De Bruyn C & Meyer N & Meyer D.F, 2018. "Assessing the Dynamic Economic Impact of Tourism in a Developing Region in South Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 10(5), pages 274-283.
    3. Tsangyao Chang & Hsiao-Ping Chu & Frederick W. Deale & Rangan Gupta & Stephen M. Miller, 2017. "The relationship between population growth and standard-of-living growth over 1870–2013: evidence from a bootstrapped panel Granger causality test," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(1), pages 175-201, February.
    4. Shahbaz, Muhammad & Ferrer, Román & Hussain Shahzad, Syed Jawad & Haouas, Ilham, 2017. "Is the tourism-economic growth nexus time-varying? Bootstrap rolling-window causality analysis for the top ten tourist destinations," MPRA Paper 82713, University Library of Munich, Germany, revised 04 Nov 2017.
    5. Muhammad Akram GILAL* & Muhammad AJMAIR** & Sohail FAROOQ***, 2019. "Structural Changes And Economic Growth In Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 29(1), pages 35-51.
    6. Muhammad Shahbaz & Román Ferrer & Syed Jawad Hussain Shahzad & Ilham Haouas, 2018. "Is the tourism–economic growth nexus time-varying? Bootstrap rolling-window causality analysis for the top 10 tourist destinations," Applied Economics, Taylor & Francis Journals, vol. 50(24), pages 2677-2697, May.
    7. Abdulnasser Hatemi-J & Rangan Gupta & Axel Kasongo & Thabo Mboweni & Ndivhuho Netshitenzhe, 2018. "Does tourism cause growth asymmetrically in a panel of G-7 countries? A short note," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(1), pages 49-57, February.
    8. Andrew Phiri, 2016. "Tourism and Economic Growth in South Africa: Evidence from Linear and Nonlinear Cointegration Frameworks," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 14(1 (Spring), pages 31-53.
    9. Buthaina M. A. Muhtaseb & Hussam-Eldin Daoud, 2017. "Tourism and Economic Growth in Jordan: Evidence from Linear and Nonlinear Frameworks," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 214-223.
    10. Nino Fonseca & Marcelino Sánchez-Rivero, 2020. "Significance bias in the tourism-led growth literature," Tourism Economics, , vol. 26(1), pages 137-154, February.
    11. Shahzad, Syed Jawad Hussain & Shahbaz, Muhammad & Ferrer, Román & Kumar, Ronald Ravinesh, 2017. "Tourism-led growth hypothesis in the top ten tourist destinations: New evidence using the quantile-on-quantile approach," Tourism Management, Elsevier, vol. 60(C), pages 223-232.
    12. Mustafa Özer & Inci Oya Coşkun & Mustafa Kırca, 2015. "Time Varying Causality Between Exchange Rates And Tourism Demand For Turkey," Tourism Research Institute, Journal of Tourism Research, vol. 10(1), pages 125-142, June.

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    More about this item

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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