Tourism and Economic Growth: A Panel Data Analysis for Pacific Island Countries

Tourism Economics, 16(1): 169-183, 2010

Posted: 10 Jun 2012

See all articles by Paresh Kumar Narayan

Paresh Kumar Narayan

Deakin University - School of Accounting, Economics and Finance

Seema Narayan

affiliation not provided to SSRN

Arti Prasad

affiliation not provided to SSRN

Biman Prasad

University of the South Pacific - Department of Economics; University of the South Pacific - Oceania Development Network

Date Written: 2010

Abstract

The contribution of tourism to the economic growth of Pacific Island countries (PICs) has achieved significance in the past decade. The shift in the economic policies of the PICs from the late 1980s has been decisively away from import substitution and agriculture to urban-based manufacturing and services sectors. Tourism is the main component of the services sector in the PICs. The contribution of tourism to economic growth in Fiji, Tonga, the Solomon Islands and Papua New Guinea is expected to grow. The authors use panel data for the four PICs to test the long-run relationship between real GDP and real tourism exports. They find support for panel cointegration and the results suggest that a 1% increase in tourism exports increases GDP by 0.72% in the long run and by 0.24% in the short run.

Suggested Citation

Narayan, Paresh Kumar and Narayan, Seema and Prasad, Arti and Prasad, Biman, Tourism and Economic Growth: A Panel Data Analysis for Pacific Island Countries (2010). Tourism Economics, 16(1): 169-183, 2010 , Available at SSRN: https://ssrn.com/abstract=2080614

Paresh Kumar Narayan (Contact Author)

Deakin University - School of Accounting, Economics and Finance ( email )

221 Burwood Highway
Burwood, Victoria 3215
Australia

Seema Narayan

affiliation not provided to SSRN ( email )

Arti Prasad

affiliation not provided to SSRN ( email )

Biman Prasad

University of the South Pacific - Department of Economics ( email )

Private Bag, Laucala Campus
Suva
Fiji

University of the South Pacific - Oceania Development Network ( email )

Suva
Fiji

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