Abstract
Tourism is a key source of income and employment today, and different parts of the world are heavily dependent on it. The main purpose of this article was to demonstrate the consequences of long-run and short-run relationship on international tourism in Pakistan and its impact on economic growth by applying an autoregressive distributed lag (ARDL) bounds testing approach. Augmented Dickey–Fuller unit root test was employed to check the stationarity of the variables, while an ARDL bounds testing approach was used to measure the long-run and short-run dynamics linkage among the study variables. The results show that international tourism and expenditures for passenger transport items have a positive impact on economic growth. Similarly, long-run dynamics also revealed that international tourism expenditures for travel items and international tourism expenditures, international tourism receipts for passenger transport items and international tourism receipts for travel items also had a positive impact on the economic growth. The present analysis of the long-run suggested better policies should be implemented to attract more international tourists to the country.
Highlights
Tourism is a significant social and cultural phenomenon that has a main economic effect on cities and is the fourth largest export in the world, after fuel, chemicals and food (Curry et al, 2016)
The autoregressive distributed lag (ARDL) model was applied because the unit root test indicates no variable was integrated with the order of I(2)
The results revealed that international tourism expenditures for passenger transport items having the coefficient of 0.066814, which is positive with a p value of
Summary
Tourism is a significant social and cultural phenomenon that has a main economic effect on cities and is the fourth largest export in the world, after fuel, chemicals and food (Curry et al, 2016). In the 1980s, the total number of tourists worldwide was 41 million. The total number of visitors over the last decade was 196 million. In 2015, 11.86 million traveled abroad and the international tourism industry generated an export income of US$1.5 trillion, which contributed to tourism being named the fifth largest industry in the world (United Nations World Tourism Organization, 2016). From the viewpoint of policy makers, outbound travel investment is an important factor for the countries of origin of tourists and exporters of destination countries that have great importance to macroeconomic management in many countries, especially developing countries (Eugenio-Martin & Campos-Soria, 2014). The fundamental premise is that citizens are drawn to international locations to learn the beauty of this society or foreign government policy (Beeton, 2005; Connell, 2012; H. Kim & Richardson, 2003; Macionis & Sparks, 2009; Portegies, 2010)
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