Open AccessThe Dynamic Relationship between Tourism and Economy: Evidence from Nepal
Author(s) -
Dipendra Karki
Publication year - 2018
Publication title -
the 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.