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This study examines the relationship between tourism and economic growth in Nepal by considering the relative importance of financial development. The newly developed Bayer and Hank joint test results show that tourism, economic growth and financial development are co-integration. The results also show that incoming tourism has stimulated short-term and long-term economic growth in Nepal. In addition, the analysis point out a long-term one-way Granger causality from tourism to economic growth. It is recommended that policies that fascinate more international visitors should be promoted.

The Impact of Inbound Tourism on Economic Growth of Nepal