Causality Between Economic Growth and Tourism Expansion: Empirical Evidence from Some Colombian Regions

Abstract

This short paper analyzes the effects in the long-run between tourism and the economic growth in the regions of Antioquia, Bolivar, Bogotá, Magdalena and San Andrés-Providencia of Colombia. Using annual data from 1990 to 2005, the study uses cointegration analysis to analyze the existence of VEC among real GDP per capita, tourism expenditures and real exchange rates. We show that the causality relationship is positive and unidirectional for all the regions but the values of elasticities are considerable different. Finally, we compare our study with similar papers also investigating the tourism-led growth hypothesis.

Keywords: economic growth, tourism earnings, Johansen cointegration test, Granger causality, Colombia

JEL Classification: C22, E01, F43, L83, O54