The African Economic Growth Experience and Tourism Receipts: A Threshold Analysis and Quantile Regression Approach

Tourism Economics, 2020

DOI: 10.1177/1354816620908688

Posted: 9 May 2020

See all articles by Herman Sahni

Herman Sahni

Baldwin Wallace University

Christian Nsiah

affiliation not provided to SSRN

Bichaka Fayissa

Middle Tennessee State University

Date Written: March 16, 2020

Abstract

By applying threshold analysis and quantile regression techniques, we investigate the linearity of the relationship between tourism receipts and economic growth. We find that a threshold exists, below and above which the relationship between tourism receipts and economic growth changes. In our sample, the threshold for tourism receipts is at 3.82% of gross domestic product. Specifically, our findings suggest that tourism receipts have a more pronounced effect on economic growth below the threshold than above the threshold. From the quantile regression analysis, we further find that countries have greater benefits from tourism at lower levels of economic growth. Thus, policy makers designing tourism policy may consider that the marginal benefit of tourism on growth wanes beyond certain levels in spite of the fact that tourism receipts are an important driver of economic growth at all levels of growth.

Keywords: Africa, Economic Growth, Fixed Effects, Panel Data, Panel Quantile Regression, Threshold Regression, Tourism

Suggested Citation

Sahni, Herman and Nsiah, Christian and Fayissa, Bichaka, The African Economic Growth Experience and Tourism Receipts: A Threshold Analysis and Quantile Regression Approach (March 16, 2020). DOI: 10.1177/1354816620908688. Available at SSRN: https://ssrn.com/abstract=3576173

Herman Sahni (Contact Author)

Baldwin Wallace University ( email )

Christian Nsiah

affiliation not provided to SSRN

Bichaka Fayissa

Middle Tennessee State University

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