Phiri, Andrew (2015): Tourism and economic growth in South Africa: Evidence from linear and nonlinear cointegration frameworks.
Preview |
PDF
MPRA_paper_65000.pdf Download (622kB) | Preview |
Abstract
This study examines cointegration and causal effects between tourism and economic growth in South Africa for annual data collected between the period of 1995 and 2014. The paper applies two empirical approaches to this end; one being the conventional Engle and Granger (1987) linear cointegration framework, and the second being a nonlinear cointegration framework of Enders and Granger (1998). Furthermore, two empirical measures of tourism development are used in the study, namely; tourist receipts and number of international tourist arrivals. In line with conventional wisdom, the empirical results of the linear framework supports the tourism-led growth hypothesis when tourist receipts are used as a measure of tourism development. However, the nonlinear framework depicts bi-directional causality between tourist receipts and economic growth. Furthermore, the linear framework supports the economic-growth-driven-tourism-hypothesis for tourist arrivals whereas the nonlinear framework depicts no causality between tourist arrivals and economic growth. Therefore, our study emphasizes on the direct relevance which tourist expenditures rather than number of tourist arrivals hold towards economic growth and overall economic development.
Item Type: | MPRA Paper |
---|---|
Original Title: | Tourism and economic growth in South Africa: Evidence from linear and nonlinear cointegration frameworks |
Language: | English |
Keywords: | Tourism receipts; Tourist arrivals; Economic growth; cointegration; causality tests; MTAR-TEC; South Africa. |
Subjects: | C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa |
Item ID: | 65000 |
Depositing User: | Dr. Andrew Phiri |
Date Deposited: | 12 Jun 2015 13:26 |
Last Modified: | 27 Sep 2019 05:03 |
References: | Adamou A. and Clerides S. (2009), “Tourism, development and growth: Evidence and lessons from Cyprus”, Cyprus Economic Policy Review, 3(2), 3-22. Aslan A. (2014), “Tourism development and economic growth in the Mediterranean countries: Evidence from panel granger causality tests”, Current Issues in Tourism, 17(4), 363-372. Balaguer J. and Cantavella-Jorda M. (2002), “Tourism as a long-run economic growth factor: The Spanish case”, Applied Economics, 34(7), 877-884. Belloumi M. (2010), “The relationship between tourism receipts, real effective exchange rate and economic growth in Tunisia”, International Journal of Tourism Research, 12, 550-560. Brida J., Sanchez-Carrera E. and Risso W. (2009), “Tourism’s impact on long run Mexican economic growth”, Economics Bulletin, 3(21), 1-8. Brida J., Lanzilotta B and Sebestian J. (2013), “A nonlinear approach to the tourism-led growth hypothesis: The case of the MERCOSUR”, Current Issues in Tourism, 18(7), 647-666. Caglayan E., Sak N. and Karymshakov K. (2011), “Relationship between tourism and economic growth: A panel granger causality approach”, Asian Economic and Financial Review, 2(5), 591-602. Chang C., Khamkaew T. and McAleer M. (2012), “IV estimation of a panel threshold model of tourism specialization and economic development”, Tourism Economics, 18(1), 5-41. Chou M. (2013), “Does tourism development promote economic growth in transition countries? A panel data analysis”, Economic Modelling, 33, 226-232. Dritsakis N. (2012), “Tourism development and economic growth in seven Mediterranean countries: A panel data approach”, Tourism Economics, 18(4), 817-834. Dubarry R. (2004), “Tourism and economic growth: The case of Mauritius”, Tourism Economics, 10(4), 389-401. Enders W. and Granger C. (1998), “Unit root tests and asymmetric adjustment with an example using the term structure of interest rates”, Journal of Business and Economic Statistics, 16(3), 304-311. Enders W. and Silkos P. (2001), “Cointegation and threshold adjustment”, Journal of Business and Economic Statistics, 29(2), 166-176. Engle R. and Granger C. (1987), “Cointegration and error correction representation, estimation and testing”, Econometrica, 55, 521-576. Ghali M. (1976), “Tourism and economic growth: An empirical study”, Economic Development and Cultural Change, 24(3), 527-538. Granger C. (1969), “Investigating causal relations by econometric models and cross-spectural methods”, Econometrica, 37(3), 424-438. Grundlingh A. (2006), “Revisiting the ‘Old’ South Africa: Excursions into South Africa’s tourist history”, South African Historical Journal, 56, 103-122. Hansen B. (1999), “Threshold effects in non-dynamic panels: Estimation, testing and inference”, Journal of Econometrics, 93, 345-368. Hatemi-J A, Gupta R, Ksango A., Mboweni T. and Netshitenzhe N. (2014), “Are there asymmetric causal relationships between tourism and economic growth in a panel of G-7 countries?”, University of Pretoria, Department of Economics Working Paper No. 2014-76, November. Johansen S. and Juselius K. (1990), “Maximum likelihood estimation and inference on cointegration with applications to the demand for money”, Oxford Bulletin of Economics and Statistics, 52(2), 169-210. Kareem O. (2013), “A reassessment of tourism-exports led growth hypothesis in Africa”, American Journal of Tourism Research, 2(1), 130-140. Khalil S., Kakar M. and Waliullah (2007), “Role of tourism in economic growth: Empirical evidence from Pakistan economy”, The Pakistan Development Review, 46(4), 985-995. Kreishan F. (2011), “Time series evidence for tourism-led growth hypothesis: A case of Jordan”, International Management Review, 7(1), 89-93. Lanza A., Templee P. and Giovanni U. (2003), “The implications of tourism specialization in the long-run: An econometric analysis for 13 OECD countries”, Tourism Management, 24(4), 315-321. Lee C and Chang C. (2008), “Tourism development and economic growth: A closer loo at panels”, Tourism Management, 29(1), 180-192, Makochekanwa A. (2013), “An analysis of tourism contribution to economic growth in SADC countries”, Botswana Journal of Economics, 11(15), 42-56. Mkhize I. (1994), “South African domestic tourism beyond apartheid”, Development South Africa, 11(2), 249-252. Modeste N. (1994), “The impact of growth in the tourism sector on economic development”, Oh C. (2005), “The contribution of tourism development to economic growth in the Korean economy”, Tourism Management, 26, 39-44. Pan S., Liu S. and Wu P. (2014), “Re-testing the tourism-led growth hypothesis using panel smooth transition regression models”, Tourism Economics, 20(1), 39-50. Pedroni P. (1999), “Critical values for co-integration tests in heterogeneous panels with multiple regressors”, Oxford Bulletin of Economic and Statistics, Special Issue No. 0305-9049, 653-670. Pesaran M., Shin Y. and Smith R. (2001), “Bounds testing approaches to the analysis of level relationship”, Journal of Applied Econometrics, 16, 289-326. Po W. and Huang B. (2008), “Tourism development and economic growth: A nonlinear approach”, Physica A, 387, 5535-5542. Ridderstaat J., Croes R. and Nijkamp P. (2014), “Tourism and long-run economic growth in Aruba”, International Journal of Tourism Research, 16(5), 472-487. Saayman A. and Saayman M. (2010), “Forecasting tourist arrivals in South Africa”, Acta Commercii, 2010, 281-293. Samimi A., Somaye J and Soraya S. (2011), “Tourism and economic growth in developing countries: P-VAR approach”, Middle-East Journal of Scientific Research, 10(1), 28-32. Seetanah B. (2011), “Assessing the dynamic economic impact of tourism for Island economies”, Annals of Tourism Research, 38(1), 291-308. Tang C. and Jang S. (2009), “The tourism-economy causality in the United States: A sub-industry level examination”, Tourism Management, 30, 553-558. Wang Y. (2012), “Research note: Threshold effects on development of tourism and economic growth”, Tourism Economics, 18(5), 1135-1141. Wang L., Zhang H. and Li W. (2012), “Analysis of causality between tourism and economic growth based on computational econometrics”, Journal of Computers, 7(9), 2152-2159. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/65000 |