Tourism and Economic Growth

Abstract

This study investigates the impact of international tourism on economic growth, a key concern for policymakers and investors. While prior research suggests tourism development can drive income generation, this study explores whether tourism’s contribution to economic growth operates independently or through conventional income determinants like capital accumulation. Utilizing an extended Solow model, we analyze data from 109 countries, spanning 1995 to 2011. The findings reveal that tourism alone does not significantly promote economic growth. Instead, tourism contributes to sustained economic growth when integrated into broader development strategies emphasizing income-determining factors. This research highlights the need for governments to support tourism development in conjunction with policies fostering overall economic growth determinants. The implications are clear: strategic tourism investment must be aligned with enhancing standard income factors to realize long-term economic benefits