Several concluded that there is a bi-directional

Several
attempts have been made to investigate the impact of tourism on economic growth
is several countries. As a matter of fact, empirical evidence bears witness
that tourism contributed to export-led economic growth.

Dritsakis
(2004), in his study on the economic growth performance of Greece, concluded
that tourism has an effect on economic growth in the long run. Furthermore,,
Tosun (1999), Balaguer and Cantavella-Jorda (2002), Guduz and Hatemi (2005), Eugenio-Martin
and Morales (2004) and Oh (2005) claimed the existence of tourism-led growth.

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Balaguer
and Cantavella-Jorda (2002) conducted an analysis on tourism as a long-run
economic growth factor. The sample country used was Spain. The results indicate
that an increase in tourism income has an effect on economic growth. Furthermore,
Dristakis (2004), while studying on tourism as a long-run economic growth
factor for Greece, concluded that there is a bi-directional relationship
between the 2 variables.

Eugenio-Martin
and Morales (2004) also conducted a study regarding the relationship between
tourism and economic growth. With their analysis based on a panel data
approach, and using data for the years 1985 to 1998 for Latin American
countries, they reached the conclusion that an increase in the number of
tourists affects economic growth positively for countries with low and medium
levels of income per capita.

Using
the new heterogeneous panel cointegration technique, Lee and Chang (2008)
conducted a study on tourism development and economic growth. They used a
sample of 32 countries, including both OECD and non-OECD countries. They
reached the conclusion that there exists a unidirectional link flowing from
tourism towards growth for OECD countries. However, for non-OECD countries,
they observed a bidirectional causality relationship.

Brau,
Lanza and Pigliaru (2003) used a sample of 143 countries in their study
attempting to determine how fast small tourist countries are growing. As such,
they selected 14 tourism countries out of the sample of 143. Using data
stretching from the year 1980 to 2003, they found out that tourism countries
grow faster than the other countries on the selected list. They further their
claim by concluding that while being small does not help a country when it
comes to growth, combined to tourist specialization, the smallness of a country
can be favorable. Sinclair (1998) adds to the claim by arguing that many
developing countries view tourism as a primordial part of their economic
growth.

Using
the convergence approach, Proenca and Soukiazis (2005) conducted a study on the
impact of tourism on per capita income growth. Collecting data for different
regions of Portugal, they concluded that tourism can help in enhancing regional
growth in Portugal. However, this will only hold if the supply side of the
tourism sector is improved. In other words, if infrastructures are built to
accommodate for the tourists, they will be able to promote regional growth.

 

Ivanov
and Webster (2006) also conducted a study on measuring the impact of tourism on
economic growth. The research used data for the years 1997 to 2004 for the
countries Cyprus, Greece and Spain. The results point out that tourism is a
major contributor to the GDP of Greece. However, the study also concluded that
the tourism industry is decreasing the growth in Cyprus and Spain.

Oh
(2005) conducted a study on the contribution of tourism development to economic
growth in the Korean economy. The research uses Engle and Granger two-stage
approach and a bivariate Vector Autoregression (VAR) model. The study points
towards a one-way causality for economic-driven tourism growth in the Korean
economy.    

Looking
at the other variables, Falki (2009) conducted a study on the impact of
investment, more precisely FDI, on economic growth. Selecting Pakistan’s
economic data for the period 1980 to 2006, a positive relationship between the
two variables was noted.

Kornecki
and Borodulin (2006) also conducted a study on the impact of investment on
economic growth. Using U.S. data for the years 1981 to 2007, the results
pointed out that FDI has a significant influence on GDP growth in the U.S.

A
study has been carried out to investigate the relationship between inflation, inflation
uncertainty and economic growth in 94 emerging and developing countries by
Baharumshah, Slesman and Wohar (2016). Using GMM estimator from 1976 to 2010,
the results show that the effect of low inflation is from negative growth
effect of high inflation rates and the growth. While in non-inflation crisis
countries, the negative-level effect of not keeping inflation in check outweigh
the positive effect from uncertainty. When inflation reaches moderate ranges
which are 5.6 to 15.9%, it is confirmed that there is the existence of a
positive effect of uncertainty about the inflation rate on growth through a
precautionary motive.

Regarding
exports and economic growth, Chow (1987) conducted a study on 8 countries for
the year 1960 to 1980. Bidirectional causality was to be noted for Brazil,
Hong-Kong, Israel, Korea, Taiwan and Singapore. On the other hand,
unidirectional causality was noticed in Mexico, while no causality was found
for Argentina. This was further agreed by Ram (1987), who conducted his study
for 88 countries for the years 1960 to 1982. As a matter of fact, he found a
positive correlation for more than 80 percent of the countries. 

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