Macroeconomic Determinants of Tourism Private Investment in Egypt: An ARDL Model

Abstract

With the increasing number of tourist arrivals and changing tourism patterns and preferences, the importance of stimulating tourism investment in Egypt has become apparent. This paper aims at examining the macro-economic determinants of tourism private investment in Egypt from 2002 to 2019. Seven macro-economic variables are used to model tourism private investment in Egypt using Autoregressive Distributed Lag (ARDL) framework. The main findings of the study show that in the long run pub1ic (government) investment, rea1 exchange rate, tourist arrivals and tourism revenue are positively correlated with private investment in the tourism sector, while real lending rate and political stability are negatively correlated with tourism private investment in Egypt. Short-run results are also consistent with the long-run outcomes. The outputs of this paper provide essential data for formulating and executing policies that aim at enhancing private investment in the tourism sector in Egypt.