Does tourism expansion and expenditure impact economic growth in Oman-New evidence from granger causality analysis

Syed Ahsan Jamil

doi:10.24294/jipd.v8i7.5439

Home - JIPD - Volume 8 - Issue 7

Submit to JIPD

Journal Browser

Volume | Year

Issue

• Current lssue

View All

News and Announcements

View All

Does tourism expansion and expenditure impact economic growth in Oman-New evidence from granger causality analysis

Syed Ahsan Jamil

Journal of Infrastructure Policy and Development 2024, 8(7), 5439; https://doi.org/10.24294/jipd.v8i7.5439

Submitted：25 Mar 2024

Accepted：21 May 2024

Published：01 Aug 2024

Download PDF(444.81KB)

Cite

XML

Abstract

The purpose of this study is to examine the impact of tourist spending and the growth of Oman’s tourism industry on the country’s GDP from 1996 to 2018. The study uses the error correction model and other tests for assessing the link among variables, such as the cointegration test and the Granger causality test, to accomplish its aims. Findings from the error correlation model and cointegration test show that there is a link between the variables in Oman over the long and short term. There is a positive and statistically significant relationship between tourist expenditures and economic growth, as well as a negative and statistically significant relationship between tourism expansion and economic growth. We now use ARDL regression estimators to assess the robustness of the empirical results. There is no evidence of a direct relationship between increased tourism and GDP growth, according to the study’s results. According to the research, sustainable tourism development is an achievable economic growth driver, and Oman should prioritize economic policies that support this trend.

Keywords

References

Adnan Hye, Q. M., & Ali Khan, R. E. (2013). Tourism-Led Growth Hypothesis: A Case Study of Pakistan. Asia Pacific Journal of Tourism Research, 18(4), 303-313. https://doi.org/10.1080/10941665.2012.658412

Ahad, M. (2016). Does Tourism-led Growth Hypothesis exist in Pakistan? A fresh look from Combine Co-integration and Causality Approach with Structural Breaks. International Journal of Economics and Empirical Research, 4(2), 94-111.

Ahmad, N., Menegaki, A. N., & Al‐Muharrami, S. (2020). Systematic literature review of tourism growth nexus: An overview of the literature and a content analysis of 100 most influential papers. Journal of Economic Surveys, 34(5), 1068-1110.

Akan, Y., Arslan, I., I¸Sık, U. C. (2008). The Impact of Tourism on Economic Growth: The Case of Turkey. J. Tour, 9, 47-69.

Alam, M. S. (2022). Is trade, energy consumption and economic growth threat to environmental quality in Bahrain–evidence from VECM and ARDL bound test approach. International Journal of Emergency Services, 11(3), 396-408. https://doi.org/10.1108/ijes-12-2021-0084

Archer, B. (1995). Importance of tourism for the economy of Bermuda. Annals of Tourism Research, 22, 918-930.

Avelini Holjevac, I. (2003). A version of tourism and the hotel industry in the 21st century. International Journal of Hospitality Management, 22, 129-134.

Balaguer, J., & Cantavella-Jordá, M. (2002). Tourism as a long-run economic growth factor: the Spanish case. Applied Economics, 34(7), 877-884. https://doi.org/10.1080/00036840110058923

Balsalobre-Lorente, D., & Leitão, N. C. (2020). The role of tourism, trade, renewable energy use and carbon dioxide emissions on economic growth: evidence of tourism-led growth hypothesis in EU-28. Environmental Science and Pollution Research, 27(36), 45883-45896. https://doi.org/10.1007/s11356-020-10375-1

Bayramoglu, T., & Ari, Y. O. (2015). The relationship between tourism and economic growth in Greece economy: A time series analysis. Computational Method in Social Sciences, 3(1), 89-93.

Bilen, M., Yilanci, V., & Eryüzlü, H. (2017). Tourism development and economic growth: a panel Granger causality analysis in the frequency domain. Current Issues in Tourism, 20(1), 27-32. https://doi.org/10.1080/13683500.2015.1073231

Brida, J. G., Punzo, L. F., & Risso, W. A. (2009). Tourism as a Factor of Growth: The Case of Brazil. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1336487

Blanka, S., & Zyonimir, K. (2016). Tourism and economic growth in the Mediterranean region: Dynamic panel data approach. Acta Economica Et Turistica, Sciendo, 2(1), 65-84.

Cárdenas-García, P. J., Sánchez-Rivero, M., & Pulido-Fernández, J. I. (2015). Does Tourism Growth Influence Economic Development? Journal of Travel Research, 54(2), 206-221. https://doi.org/10.1177/0047287513514297

Chris, A. O. (2015). Prospect and problems of sustainable tourism in Nigeria. International Journal of Management Science, 6(11), 508-514.

Chingarande, A., & Saayman, A. (2018). Critical success factors for tourism‐led growth. International Journal of Tourism Research, 20(6), 800-818. Portico. https://doi.org/10.1002/jtr.2233

Comerio, N., & Strozzi, F. (2019). Tourism and its economic impact: A literature review using bibliometric tools. Tourism Economics, 25(1), 109-131. https://doi.org/10.1177/1354816618793762

Dogru, T., & Bulut, U. (2018). Is tourism an engine for economic recovery? Theory and empirical evidence. Tourism Management, 67, 425-434. https://doi.org/10.1016/j.tourman.2017.06.014

Enilov, M., & Wang, Y. (2021). Tourism and economic growth: Multi-country evidence from mixed-frequency Granger causality tests. Tourism Economics, 28(5), 1216-1239. https://doi.org/10.1177/1354816621990155

Fayissa, B., Nsiah, C., & Tadasse, B. (2007). Impact of Tourism on Economic Growth and Development in Africa. Tourism Economics, 14(4), 807-818. https://doi.org/10.5367/000000008786440229

Fonseca, N., & Sánchez Rivero, M. (2020). Granger Causality between Tourism and Income: A Meta-regression Analysis. Journal of Travel Research, 59(4), 642-660. https://doi.org/10.1177/0047287519851189

Fonseca, N., & Sánchez-Rivero, M. (2020). Significance bias in the tourism-led growth literature. Tourism Economics, 26(1), 137-154. https://doi.org/10.1177/1354816619833564

Khan, A., Bibi, S., Lorenzo, A., et al. (2020). Tourism and Development in Developing Economies: A Policy Implication Perspective. Sustainability, 12(4), 1618. https://doi.org/10.3390/su12041618

Kreishan, F. M. (2015). Empirical Study on Tourism and Economic Growth of Bahrain: An ARDL Bounds Testing Approach. International Journal of Economics and Finance, 7(11), 1. https://doi.org/10.5539/ijef.v7n11p1

Lawal, A. I., Asaleye, A. J., Iseolorunkanmi, J., & Popoola, O. (2018). Economic growth, agricultural output and tourism development in Nigeria: An application of the ARDL bound testing approach. Journal of Environmental Management and Tourism, 9(4).

Lin, V. S., Yang, Y., & Li, G. (2019). Where Can Tourism-Led Growth and Economy-Driven Tourism Growth Occur? Journal of Travel Research, 58(5), 760-773. https://doi.org/10.1177/0047287518773919

Li, K. X., Jin, M., & Shi, W. (2018). Tourism as an important impetus to promoting economic growth: A critical review. Tourism Management Perspectives, 26, 135-142. https://doi.org/10.1016/j.tmp.2017.10.002

Leit-Ao, N. C., & Shahbaz, M., (2016). Economic growth, tourism arrivals and climate change. Bulletin of Energy Economics (BEE). The Economics and Social Development Organization, 4(1), 35–43.

Martin, H. (2019). Tourism: The Sultanate’s next chapter. Available online: https://timesofoman.com/article/785210 (accessed on 11 August 2023).

McKinnon, R. I. (1964). Foreign Exchange Constraints in Economic Development and Efficient Aid Allocation. The Economic Journal, 74(294), 388. https://doi.org/10.2307/2228486

Mishkin, F. S., & Eakins, S. G. (2003). Financial markets and institutions, 4th ed. Wiley.

Mitra, S. K. (2019). Is tourism‐led growth hypothesis still valid? International Journal of Tourism Research, 21(5), 615–624. Portico. https://doi.org/10.1002/jtr.2285

Nissan, E., Galindo, M.-A., & Méndez, M. T. (2011). Relationship between tourism and economic growth. The Service Industries Journal, 31(10), 1567-1572. https://doi.org/10.1080/02642069.2010.485636

Nunkoo, R., Seetanah, B., Jaffur, Z. R. K., et al. (2019). Tourism and Economic Growth: A Meta-regression Analysis. Journal of Travel Research, 59(3), 404-423. https://doi.org/10.1177/0047287519844833

Ohlan, R. (2017). The relationship between tourism, financial development and economic growth in India. Future Business Journal, 3(1), 9-22. https://doi.org/10.1016/j.fbj.2017.01.003

Ozturk, I., & Acaravci, A. (2009). On the causality between tourism growth and economic growth: Empirical evidence from Turkey. Transylvanian Review of Administrative Sciences, 5(25), 73-81.

Pablo-Romero, M. D. P., & Molina, J. A. (2013). Tourism and economic growth: A review of empirical literature. Tourism Management Perspectives, 8, 28-41.

Phiri, A. (2016). Tourism and economic growth in South Africa: Evidence from linear and nonlinear cointegration frameworks. Managing Global Transitions, 14(1), 31-53.

Ribeiro, E. da C., & Wang, B. (2020). Tourism led growth hypothesis: has the tourism industry an impact on the economic growth of Sao tome and Principe? International Journal of Economics and Financial Issues, 10(1), 180-185. https://doi.org/10.32479/ijefi.9105

Samina, K., Kakar, M. K., Waliullah. (2007). Role of tourism in Economic Growth: Empirical Evidence from Pakistan Economy. The Pakistan Development Review, 46(4), 985-995.

Sarpong, S. Y., Bein, M. A., Gyamfi, B. A., & Sarkodie, S. A. (2020). The impact of tourism arrivals, tourism receipts and renewable energy consumption on quality of life: A panel study of Southern African region. Heliyon, 6(11).

Shakouri, B., Yazdi, S. K., Nategian, N., Shikhrezaei, N. (2017). The relation between international tourism and economic growth. Journal of Tourism & Hospitality, 6(4), 1-7.

Shahzad, S. J. H., Shahbaz, M., Ferrer, R., et al. (2017). Tourism-led growth hypothesis in the top ten tourist destinations: New evidence using the quantile-on-quantile approach. Tourism Management, 60, 223-232. https://doi.org/10.1016/j.tourman.2016.12.006

Sinclair, M. T. (1998). Tourism and economic development: A survey. Journal of Development Studies, 34(5), 1-51. https://doi.org/10.1080/00220389808422535

Suryandaru, R. (2020). Measuring tourism-led growth hypothesis in Indonesia. International Journal of Culture, Tourism and Hospitality Research, 14(2), 295–300. https://doi.org/10.1108/ijcthr-03-2019-0055

Tabash, I. M. (2017). The role of tourism sector in economic growth: An empirical evidence from Palestine. International Journal of Economics and Financial Issues, 7(2), 103-108.

Tang, C. F., & Tan, E. C. (2015). Does tourism effectively stimulate Malaysia’s economic growth? Tourism Management, 46, 158-163. https://doi.org/10.1016/j.tourman.2014.06.020

Sinclair, M. T. (1998). Tourism and economic development: A survey. Journal of Development Studies, 34(5), 1-51. https://doi.org/10.1080/00220389808422535

Tuncay, N., & Özcan, C. C. (2020). The effect of Dutch disease in the tourism sector: the case of Mediterranean countries. Tourism and Hospitality Management, 26(1), 97-114. https://doi.org/10.20867/thm.26.1.6

Tugcu, C. T. (2014). Tourism and economic growth nexus revisited: A panel causality analysis for the case of the Mediterranean Region. Tourism Management, 42, 207-212. https://doi.org/10.1016/j.tourman.2013.12.007

Usmani, G., Akram, V., & Praveen, B. (2020). Tourist arrivals, international tourist expenditure, and economic growth in BRIC countries. Journal of Public Affairs, 21(2). https://doi.org/10.1002/pa.2202

Wang, W., & Ma, H. (2015). On Econometric Analysis of the Relationship between GDP and Tourism Income in Guizhou, China. International Journal of Business Administration, 6(4). https://doi.org/10.5430/ijba.v6n4p41

West, G. R. (1993). Economic significance of tourism in Queensland. Annals of Tourism Research, 20(3), 490-504.

WTTC. (2020). Travel & Tourism Global Economic Impact & Trends. World Travel & Tourism Council.

Previous
article in this issue

Next
article in this issue