THE RELATIONSHIP BETWEEN INTERNATIONAL TOURISM RECEIPTS AND ECONOMIC GROWTH IN ASIA PACIFIC COUNTRIES: A PANEL DATA ANALYSIS

In this research, the short-term and the long-term relationships between tourism receipts and economic growth was investigated. The dataset includes 483 observations for the period from 1995 to 2017 of selected 21 Asia Pacific Economies. According to “Dumitrescu & Hurlin VAR Panel Causality Test”, which is employed to analyse the short-term causality, it is revealed that (a) tourism receipts is the granger cause of economic growth, and (b) “economic growth is the granger cause of tourism receipts. Hence, it is concluded a bi-directional causality between tourism receipts and economic growth in the short-term. Westerlund ECM Panel Co-Integration Test and Pesaran & Smith Mean Group Estimator, which are performed to test the long-term relationship, indicated that (a) economic growth affects tourism revenues; a 1% increase in economic growth raises tourism revenues by 1.9% in long-term and vice versa, (b) tourism revenues affects economic growth; a 1% increase in tourism revenues raises the economic growth by 0.49 % in long-term, and vice versa. These results support the feedback hypothesis that claims a bi-directional relationship between international tourism receipts and economic growth