An empirical asymmetric effect of the tourism-led growth hypothesis in the Chinese economy

Abstract

ABSTRACTWith its ability to spur growth and jobs, tourism has become an important part of the Chinese economy. In light of this, this research empirically investigates the inconsistent effect of the tourism-led growth theory within the framework of China. This study uses an innovative method to take possible connection asymmetries into consideration. We employ both symmetric and asymmetric multivariate panel Granger causality tests to explore the causal connection between China's economic growth and international tourism revenues (ITRs). In this study, the years 1995-2019 have been investigated. The conclusions of our research are substantial. In particular, we find symmetric causation in Henan, where there is a notable and statistically significant one-way Granger causality link between ITRs and real gross domestic product (RGDP). In contrast, our study shows that there is a substantial one-way Granger causation link between ITRs and RGDP in Hunan. These findings have important ramifications and offer some evidence in favor of the hidden tourism-led growth theory. More precisely, our results are in line with the hypothesis in Heilongjiang, Henan, Hubei and Jiangxi. In summary, this research advances knowledge of the tourism-led growth theory pertaining to the Chinese economy. The presence of asymmetric effects underscores the importance of tailoring policy responses to specific economic conditions and contexts. Our findings provide valuable guidance for policymakers and industry stakeholders seeking to harness the full potential of tourism as an engine of economic growth in China.