Abstract
In Sri Lanka, tourism has been identified as the third largest and fastest growing source of foreign currency in 2018, after private remittances and textile and garment exports, accounting for almost $4.4 billion or 4.9 percent of gross domestic product in 2018. Tourism industry is a key element which accelerates the economic growth by earning high foreign exchange and reducing poverty by providing direct and indirect employment opportunities to locals. This study primarily investigates the impact of between tourism sector on economic growth by employing Augmented Dickey Fuller’s unit root test, correlation analysis and regression analysis. Annual data from 1989 to 2018 was used. The dependent variable was economic growth while tourists’ receipts were independent variable. Strong and positive correlation was explored between tourists’ receipts and economic growth meanwhile the results of regression analysis indicate that tourists’ receipts significantly impact on the economic growth.
Highlights
1.1 Background of the StudyTrade in services such as tourism, transport and computer services sector bring notable surplus to every country in the world as it increases foreign exchange income and employment opportunities
The findings reveal that there is positive correlation between tourism industry and economic growth (GDP per capita) with the estimated coefficient value of 0.955684 and p value of 0.0000 which is significant at 1 per cent significant level
There is strong and positive relationship between tourism industry and economic growth. This finding is supported with previous studies (Lee& Kwon.1995.) 4.3 Results of Regression Analysis Regression analysis is carried out to examine how much of the variance in the dependent variable is predicted by the independent variable
Summary
1.1 Background of the StudyTrade in services such as tourism, transport and computer services sector bring notable surplus to every country in the world as it increases foreign exchange income and employment opportunities. The number of international tourists exceeded 1 billion in 2012 and it is estimated that this number will go beyond 1.8 billion in 2030.Sri Lanka is a beautiful island which is located in the Indian ocean. It is an iconic country among world tourists for its fabulous tourist destinations like sand beaches, natural harbours, hills, mountains, forests, sanctuaries, ancient monuments, temples etc.
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