ARE THE TOURISM LED-GROWTH AND PUBLIC EXPENDITURE STRATEGIES COUNTERACT IN THE LONG-RUN: A FURTHER INVESTIGATION ON DEVELOPING COUNTRIES

Year 2017, , 25 - 36, 30.03.2017

S. Cagri Esener , Yaprak Karadag

https://doi.org/10.17261/Pressacademia.2017.363

Abstract

Purpose- The
purpose of this study is to investigate the effects of tourism and public
fiscal mechanisms on economic growth by using panel data of 41 countries which
are classified as Upper and Lower Middle-Income Countries by World Bank from
1996 to 2014.

Methodology- In order
to accomplish this objective, we utilize both the static panel data approach
and dynamic generalized method of moments (GMM) techniques to examine the
impacts of explanatory variables on the dependent variable.

Findings- Our
findings indicate that specialization in tourism per se or relying just on the
public expenditure may have a significant negative effect on GDP per capita
growth in developing countries. On the other hand, our study strongly supports
the positive effects of openness and female workforce. But growing population
and labor force participation rate -which are also statistically significant-,
led per capita growth through to the undesired risky levels in the economy.

Conclusion- Contrary
to consensus and expectations, our estimation results reveal the need for some
structural changes or reforms both in public spending and tourism-led growth
strategies in the long run.

Keywords

Tourism, public expenditure, fiscal policy, economic growth, panel data analysis

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