%0 Journal Article
%T Tourism Expansion and Economic Development: Var/Vecm Analysis and Forecasts for the Case of India
%A Andreas G. Georgantopoulos
%J Asian Economic and Financial Review
%D 2013
%I Asian Economic and Social Society
%X This study tests for the existence and direction of causality between output growth and tourism expenditure using a trivariate model with real effective exchange rate (REER), analysed as a whole and in sub-categories (i.e. leisure travel and tourism expenditures, LTS and business travel and tourism expenditures, BTS) during the period 1988-2011 for India. For this purpose exhaustive empirical evidence are provided from the application of Phillips-Perron and KPSS unit root tests, Johansen cointegration tests, VAR models with an error-correction term, impulse responses, variance decompositions and forecasts generated from the VAR/VECM models. Results for the aggregated model indicate that all variables return to their long-run equilibrium relationships although this model failed to support the significance of causal links between total tourism expenditure and India¡¯s real output. However, the application of the disaggregated model imply strong bidirectional causal links between growth and LTS in the long-run and unidirectional causal links from LTS and BTS to growth suggesting direct impact of tourism on the Indian real output. Finally, forecasts generated for the period 2012-2016 are promising; total tourism expenditure compared to the previous half-decade will grow at a similar pace and optimistic forecasts are generated for the case of LTS, BTS and GDP.
%K Tourism
%K Economic Growth
%K Cointegration
%K Forecasts
%K India
%U http://www.aessweb.com/abstract.php?m=April2013&id=5002&aid=1837