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A Panel Cointegration Analysis of the Impact of Tourism on Economic Growth: Evidence from the Middle East Region
Author(s) -
Saleh Ali Salman,
Assaf A. George,
Ihalanayake Ranjith,
Lung Sidney
Publication year - 2013
Publication title -
international journal of tourism research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.155
H-Index - 58
eISSN - 1522-1970
pISSN - 1099-2340
DOI - 10.1002/jtr.1976
Subject(s) - cointegration , tourism , panel data , economics , middle east , investment (military) , foreign direct investment , estimation , macroeconomics , panel analysis , econometrics , economy , international economics , economic geography , geography , political science , management , archaeology , politics , law
This paper examines the contribution of tourism industry to the GDP of three selected destinations in the Middle East region: Bahrain, Jordan and Saudi Arabia. We introduce a quadratic functional form and apply the advanced panel cointegration dynamic model with robust estimation to test our hypothesis. Our analysis is based on a comprehensive set of panel data of tourism receipts, education investment, foreign direct investment and fixed capital formation over the period of 1981–2008. The results show a long‐run relationship between tourism growth and GDP. We also show that tourism has a stronger impact on the economy than other related sectors. Copyright © 2013 John Wiley & Sons, Ltd.