Title: Tourism led economic growth in India: an application of vector error correction model

Authors: Tushinder Preet Kaur; Pooja Kansra

Addresses: School of Business, Lovely Professional University, Jalandhar, India ' School of Business, Lovely Professional University, Jalandhar, India

Abstract: Tourism promotes economic growth in a significant manner. The importance of tourism to economic growth has been widely recognised due to its contribution to employment, balance of payment, gross domestic product (GDP), etc. In the present paper an effort has been made to examine the link between the economic growth, investment and net exports from tourism sector by employing the technique of co-integration and VECM. The resulting co-integrating vectors indicate that there exists a long run relationship between GDP, investment in tourism sector, net exports from tourism and employment generation. Thus, it is one of the important factors affecting the economic growth in India with significant multiplier effect.

Keywords: economic growth; gross domestic product; GDP; tourism; employment; investment; net exports; causality; co-integration; domestic spending; FDI; India.

DOI: 10.1504/IJBG.2018.095771

International Journal of Business and Globalisation, 2018 Vol.21 No.4, pp.517 - 530

Received: 17 Apr 2017
Accepted: 30 Aug 2017
Published online: 22 Oct 2018 *

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