Analyzing the impact of terrorism on tourism in Sri Lanka

Abstract

While terrorism brings fear and chaos, tourism is the epitome of peace and happiness. Sri Lanka has always attracted international tourists due to tropical climate and beautiful tourist destinations. However, terrorism and the recent debt crisis have led to chaos and economic failure; in this study, the impact of terrorism, external debt, and military expenditure on international tourism in Sri Lanka have been empirically studied to unravel the dynamics. Dynamic ARDL simulation and cumulative fourier frequency causality results highlight the presence of an inverted N‐shaped association between terrorism and tourism, as well as external debt and tourism. The phenomenal results from this analysis provide essential policy suggestions for Sri Lanka for economic recovery through the promotion of international tourism.