The Dynamic Relationship between Tourism and Economy: Evidence from Nepal | Zendy

Dipendra Karki | Zendy

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The Dynamic Relationship between Tourism and Economy: Evidence from Nepal

Author(s) -

Dipendra Karki

Publication year - 2018

Publication title -

journal of business and management

Language(s) - English

Resource type - Journals

ISSN - 2350-8868

DOI - 10.3126/jbm.v5i0.27384

Subject(s) - cointegration , tourism , economics , augmented dickey–fuller test , real gross domestic product , gross domestic product , econometrics , exchange rate , order (exchange) , macroeconomics , short run , error correction model , time series , geography , mathematics , statistics , finance , archaeology

The objective of this paper is to analyse the role of tourism in the Nepalese economic growth. I use a trivariate model of real Gross Domestic Product (GDP), international tourist arrivals and real effective exchange rate to investigate the long-run and short-run relationship between tourism and economic growth. The Augmented Dickey-Fuller ( ADF) test is used to determine the order of integration of the series, and I employ the Engle- Granger cointegration procedure to test for the presence of long-run relationship. By using annual macroeconomic data for Nepal for the period of 1962-2011, results reveal that there is a cointegrating relationship between tourism and economic growth.

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