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International tourism and economic development in South Africa: a Granger causality test
Author(s) -
Akinboade Oludele A.,
Braimoh Lydia A.
Publication year - 2009
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.743
Subject(s) - granger causality , tourism , economics , causality (physics) , earnings , gross domestic product , real gross domestic product , exchange rate , cointegration , error correction model , macroeconomics , international economics , monetary economics , development economics , econometrics , geography , finance , physics , archaeology , quantum mechanics
One of the major objectives of macroeconomic policies in many developing countries is sustained economic growth, and South Africa has been striving to achieve and maintain this in various ways. One of these is through international tourism. Although international tourism contributes to the growth of many economies, it is in turn, impacted by growth in many developed countries. Real gross domestic product (GDP), international tourism earnings, real effective exchange rate and exports were analysed within a multivariate vector auto regressive model using annual data covering 1980–2005. The main focus of this study therefore was to demonstrate the direction of causality between international tourism earnings and long‐run economic growth of South Africa, among other variables, using Granger causality analysis. The result obtained showed a unidirectional causality running from international tourism earnings to real GDP, both in the short run and in the long run. The error correction mechanism carried out also supported this causality. Copyright © 2009 John Wiley & Sons, Ltd.