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The Impact of Tourism on Economic Growth and Development in Africa

Author

Listed:
  • Bichaka Fayissa
  • Christian Nsiah
  • Badassa Tadasse

Abstract

Over the decade of the 1990s, Africa has experienced a rise in tourist arrivals from 8.4 million to 10.6 million and receipts growth from $2.3 billion to $3.7 billion, respectively. According to the World Tourism Organization (WTO, 2006), the tourism industry in Sub-Saharan Africa enjoyed a robust annual market share growth rate of 10 percent in 2006. In spite of this, there are only few empirical studies that investigate the contributions of tourism to economic growth and development for African economies. Using a panel data of 42 African countries for the years that span from 1995 to 2004, this study explores the potential contribution of tourism to economic growth and development within the conventional neoclassical framework. The results show that receipts from the tourism industry significantly contribute both to the current level of gross domestic product and the economic growth of Sub-Saharan African countries as do investments in physical and human capital. Our findings imply that African economies could enhance their short-run economic growth by strategically strengthening their tourism industries.

Suggested Citation

  • Bichaka Fayissa & Christian Nsiah & Badassa Tadasse, 2007. "The Impact of Tourism on Economic Growth and Development in Africa," Working Papers 200716, Middle Tennessee State University, Department of Economics and Finance.
  • Handle: RePEc:mts:wpaper:200716
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    File URL: http://capone.mtsu.edu/berc/working/TourismAfricawp.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Brida, Juan Gabriel & Barquet, Andrea & Risso, Wiston Adrián, 2009. "Causality between Economic Growth and Tourism Expansion: Empirical Evidence from Trentino - Alto Adige," MPRA Paper 25316, University Library of Munich, Germany, revised 14 Dec 2009.
    2. repec:kap:ecopln:v:51:y:2018:i:1:d:10.1007_s10644-016-9198-6 is not listed on IDEAS
    3. 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.
    4. Akama, Erick, 2016. "International tourism receipts and economic growth in Kenya 1980 -2013," MPRA Paper 78110, University Library of Munich, Germany.
    5. Salahodjaev, Raufhon & Safarova, Nilufar, 2015. "Do foreign visitors reward post-communist countries? A panel evidence for tourism-growth nexus," MPRA Paper 66215, University Library of Munich, Germany.
    6. repec:scm:rdtusv:v:21:y:2016:i:21:p:3 is not listed on IDEAS
    7. Ronald Kumar & Nanthakumar Loganathan & Arvind Patel & Radika Kumar, 2015. "Nexus between tourism earnings and economic growth: a study of Malaysia," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(3), pages 1101-1120, May.
    8. Chang, C-L. & Khamkaew, T. & McAleer, M.J., 2009. "A Panel Threshold Model of Tourism Specialization and Economic Development," Econometric Institute Research Papers EI 2009-40, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    9. Narayan, Paresh Kumar & Sharma, Susan Sunila & Bannigidadmath, Deepa, 2013. "Does tourism predict macroeconomic performance in Pacific Island countries?," Economic Modelling, Elsevier, vol. 33(C), pages 780-786.
    10. 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.
    11. repec:lpe:efijnl:201707 is not listed on IDEAS
    12. Sema AY & Elif KARAKURT TOSUN & Hilal YILDIRIR KESER, 2016. "ULUDAG WINTER TOURISM and ITS IMPORTANCE IN THE ECONOMIC DEVELOPMENT," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 4, pages 31-39, August.
    13. Bichaka Fayissa & Christian Nsiah & Badassa Tadasse, 2009. "Tourism and Economic Growth in Latin American Countries(LAC): Further Empirical Evidence," Working Papers 200902, Middle Tennessee State University, Department of Economics and Finance.
    14. 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.
    15. 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.
    16. Repík Ondřej, 2015. "On the issue of growth and development within the context of tourism," Czech Journal of Tourism, Sciendo, vol. 3(2), pages 127-146, August.
    17. K.Ali Akkemik & Erisa Dautaj Şenerdem, 2014. "CGE Assessment of Tourism Policies in Turkey," ERSA conference papers ersa14p891, European Regional Science Association.
    18. Amavilah, Voxi Heinrich, 2008. "Domestic resources, governance, global links, and the economic performance of Sub-Saharan Africa," MPRA Paper 11193, University Library of Munich, Germany.
    19. Daniel Bulin & Nela Miru & Georgica Gheorghe, 2014. "The Impact of Tourism Industry in the Economy. The Case of the Black Sea Region Countries," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(2), pages 74-79, June.
    20. Muhammad Ahad, 2016. "Does Tourism-led Growth Hypothesis exist in Pakistan? A Freshlook from Combine Cointegration and Causality Approach with Structural Breaks," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 4(2), pages 94-111, February.
    21. Elçin Aykac Alp & Elif Guneren Genc, 2015. "The Relation between Current Account Deficit and Tourism: The Case of Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 448-453.

    More about this item

    Keywords

    Tourism; Economic Growth; Sub-Sahara Africa; Dynamic Panel Data; Fixed Effects; Random Effects; and Arellano-Bond Models;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • 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
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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