Moderation effects of political instability and tourism on economic growth

Saha, Shrabani, Yap, G. and Kim, Y-R. (2021) Moderation effects of political instability and tourism on economic growth. Tourism Analysis . ISSN 1083-5423

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Item Type:Article
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This study examines the impacts of inbound tourism on economic growth by using panel system-generalized-methods-of-moments techniques for over one hundred countries during the period 1995-2016. Using political instability as a moderator variable, the evidence shows that inbound tourism alone can lead to economic growth along with an increase in the standard control variables such as capital formation, education, and R&D expenditure. Nevertheless, a significant adverse effect on economic growth is revealed in the presence of medium to high political instability. The marginal impact of inbound tourism on economic growth with a high level of political instability is more detrimental in low-income countries than in their counterparts. Developing countries, which are heavily reliant on tourism, suffer more severe damages to economic growth when there is increasing political instability. Therefore, the analysis concludes that political stability is one of the key players in sustainable tourism development and economic growth.

Keywords:economic growth; political instability; sustainable tourism; tourism development
Divisions:Lincoln International Business School
ID Code:44725
Deposited On:29 Apr 2021 10:58

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