DOES SOCIAL MEDIA MODERATE THE LINK BETWEEN TOURISM AND ECONOMIC WELL-BEING? EVIDENCE FROM THE ITERATED GMM APPROACH

The relevance of social media to tourism and, subsequently, economic well-being is demonstrable in the target marketing of tourism products and services to potential customers at tourist destinations. Using a dataset from the 40 most visited countries across different continents over the period 2009 to 2020, this study investigates the effect of tourism and social media on economic well-being. It also examines the role of social media as a moderating factor in this relationship. The study adopts the tourism-led growth hypothesis as the main theoretical rationale to explain the underlying relationship between tourism, social media, and economic well-being. The empirical analysis is conducted using the iterated generalized method of moments (GMM). The results show that tourism development helps to promote economic well-being, while social media has a dampening effect. Additionally, the findings indicate that a high level of social media penetration has a significant and positive moderating effect on the nexus between tourism and economic well-being. This suggests that social media-driven tourism can significantly improve the economic well-being of destination countries. Conducive macroeconomic conditions and political stability are also concurrent with the contributory effects of tourism on the economic well-being of destination countries.