Abstract
Tourism is considered a competent driver of development in emerging economies. This study assesses the role of tourism in shaping the fundamental pillars of development in developing economies by targeting the case of Pakistan. Various econometric techniques and approaches were used to investigate the causal relationships of tourism with economic growth, energy and agriculture development, and poverty. This study highlights the important role of tourism in the development of emerging economies. The findings of our study suggest that a 1% increase in tourism significantly enhances gross domestic product (GPD) by 0.051%, foreign direct investment by 2.647%, energy development by 0.134%, and agriculture development by 0.26%, and reduces poverty by 0.51% in the long run. Hence, policy-makers should be informed that through public interventions, tourism can advance development by the design and implementation of integrated policies in developing economies. In addition, policy consistency and coherence are essential for competitiveness, sustainability, and maximizing benefits from tourism.
Highlights
Every year, scholars attempt to discover new mechanisms that can enhance growth in developing nations
The findings of our study suggest that a 1% increase in tourism significantly enhances gross domestic product (GPD) by 0.051%, foreign direct investment by 2.647%, energy development by 0.134%, and agriculture development by 0.26%, and reduces poverty by 0.51% in the long run
Scholars suggest that the bounds test approach is sensitive to lag length [54]; the lag length was estimated by using vector autoregressive (VAR) lag order selection criteria, and the results indicated that the optimum lag length was 3, confirmed by Akaike’s Information Criterion (AIC) Hannan–Quinn Criterion (HQ) Schwarz Criterion (SC) criteria
Summary
Scholars attempt to discover new mechanisms that can enhance growth in developing nations. A literature review suggests that in most developing nations, growth is supported by tourism, agriculture, capital, and energy development. Tourism development has gotten worldwide recognition as an impetus for economic growth, agriculture, and energy development and poverty alleviation. It is widely believed that tourism development leads to economic growth, though scholars conflict with the basis of empirical investigations (for instance, see [1,2,3,4]). Governments in the developing world support and promote tourism due to its high multiplier effects in terms of generating employment, increasing foreign exchange earnings, having a positive impact on the balance of payment, and stimulating the supply sectors of tourism; all these activities help to alleviate poverty (for instance, see [5,6,7]). Scholars suggest that an increase in tourism activities leads to a higher demand for energy development (for instance, see [11,12]). Tourism plays a vital role in economic growth and overcoming poverty in developing nations
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