Title: Examining tourism-led growth hypothesis for India

Authors: Sajal Ghosh

Addresses: Management Development Institute, Room No. C – 10, MDI, P.O. Box No. 60, Mehrauli Road, Sukhrali, Gurgaon 122001, India

Abstract: The impact of international tourism on a country|s economic growth has attracted a great deal of attention among economists and policy makers. This study probes tourism-led growth (TLG) hypothesis for India employing bounds test and Johansen approaches of cointegration using annual data for the time span from 1980 to 2006 in a multivariate framework. Empirical results reveal the absence of a long-term equilibrium relationship between international tourist arrivals and economic activity in India. It also fails to establish any short-run relationship between international tourist arrivals and economic growth in an unrestricted vector autoregression framework. Thus, this study rejects TLG hypothesis for India.

Keywords: cointegration; ARDL; autoregressive distributed lag; economic growth; real exchange rates; international tourism; tourism-led growth; bounds test; Soren Johansen; annual data; time spans; multivariate frameworks; long-term relationships; equilibrium relationships; tourist arrivals; economic activity; short-run relationships; unrestricted vectors; autoregression frameworks; India; Indian culture; business management.

DOI: 10.1504/IJICBM.2011.040169

International Journal of Indian Culture and Business Management, 2011 Vol.4 No.3, pp.347 - 355

Published online: 31 Jan 2015 *

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