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The journey towards dollarization: the role of the tourism industry

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  • Raheem, Ibrahim
  • Ajide, Kazeem

Abstract

There has been an increasing wave of globalization since the turn of the millennium. This study focuses on two by-products of globalization: dollarization and tourism. Empirical studies have ignored the possible relationship between dollarization and tourism. However, we hypothesize that a booming tourism industry will fuel increase in the usage and circulation of foreign currencies, thus increasing the level of dollarization. The objective of this study is to examine the extent to which the tourism industry exacerbates the dollarization process of selected Sub-sahara African (SSA) countries. Using Tobit regression, we found that tourism positively affects dollarization. Our results are robust to: (i) alternative measures of tourism; (ii) accounting for endogeneity and outlier effects.

Suggested Citation

  • Raheem, Ibrahim & Ajide, Kazeem, 2020. "The journey towards dollarization: the role of the tourism industry," MPRA Paper 105505, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:105505
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    More about this item

    Keywords

    Dollarization; tourism; Subsaharan Africa;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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