The Validity of Tourism-led Growth Hypothesis for The Top Ten Tourism Revenue Generating Countries

This study aims to test the validity of the tourism-led growth hypothesis. For this purpose, ten countries with the highest tourism income (USA, China, Australia, France, Italy, England, Spain, Germany, Japan, Thailand) are included in the analysis covering the period 1995-2018. Pedroni cointegration, panel Dynamic Ordinary Least Square (DOLS) and panel Fully Modified Ordinary Least Square (FMOLS) methods are utilized by using economic growth, tourism revenues and exchange rate series. According to panel DOLS and panel FMOLS test results, tourism revenues and exchange rate have a positive effect on economic growth. Furthermore, Granger causality analysis findings indicate a uni-directional causal relation from tourism revenues to economic growth and from exchange rate to tourism. The overall results of the empirical analysis verify the tourism-led growth hypothesis for the ten countries with the highest tourism income.