THE TOURISM-LED GROWTH HYPOTHESIS IN TRANSITION ECONOMIES? EMPIRICAL EVIDENCE FROM A PANEL DATA ANALYSIS

Abstract

Tourism has been considered as a potential factor in development strategy in many developed and developing countries worldwide. Besides, tourism is really a key economic sector in some countries. This study aims to examine the tourism-led growth hypothesis for some transition countries, which includes seven high growth economies Bulgaria, Hungary, Poland, Romania, Russia, Ukraine and Vietnam. The research database is collected by an annual form in the period of 1995-2019. These economies are considered successful transitional cases in the global economy, however, the tourism-led growth hypothesis in these countries has been received only a little evidence from academics in recent years. The Johansen-Fisher test and the OLS estimation are applied in the quantitative process. There are some new findings from the empirical results. First, the Johansen-Fisher test confirms the existence of long-run cointegration relationships between tourism (denoted by the tourism revenue and the tourism arrivals) and economic growth in the panel data sample of countries. Second, the long-run coefficients of the tourism variables are positive and significant that concludes the tourism-led growth hypothesis in these transition countries. The contribution of the study is not only to fill the empirical research gap by the estimated results from a group of transition economies but also to confirms the tourism-led growth platform as an efficient development strategy for other developing countries. Furthermore, our study suggests some policy implications for policymakers to use tourism as a key development sector in these countries in the future.