Tourism Spending-Economic Growth Causality in 49 Countries: A Dynamic Panel Data Approach

Tourism is an important economic engine. According to the World Tourism Organization (UNWTO), the international tourism has grown steadily over the last sixty years; where it constitutes one of the leading sectors with the fastest growing in the world. "Tourism has become one of the main items of international trade. Today, international tourism is become the fourth largest source of export revenue after the oil industry, chemical and automotive. This study analyzes the relationship between tourism spending and economic Growth in 49 countries, using the panel co-integration and panel Granger causality tests. The results show a significant way which is a co-integrating relationship between economic Growth and tourism spending. The results also indicate bidirectional causality between tourism spending and economic Growth, which could be a good tool to prioritize the allocation of resources across industries to ensure a better tourism in general and economic outcomes. Investors and managers may also use this causality to identify the best time for investment and business strategies by observing the evolution of the performance of higher temporal hierarchy industries. (C) 2015 The Authors. Published by Elsevier B.V.