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The study attempts to understand the contribution of international tourism on economic growth at a sub-national level (i.e. for Kerala) of the Indian economy. By exercising Johansen cointegration test and Vector Error Correction Model on the annual data from 1980 to 2017, it reveals the existence of a positive long-run association between tourism and economic growth. It finds that an increase of Foreign Tourist Arrivals (FTA) by 1% leads to almost a same percentage increase in Gross State Domestic Product (by 0.97%) in the long-run. Thus, it suggests that tourism has a significant potential of unleashing the economic growth of Kerala and this is found to be robust with the use of alternative econometric estimation methods.

Contribution of international tourism to economic growth of Kerala: a subnational-level analysis in India