The Impact of Tourism on Economic Growth: A Panel Co-integration from the Community of Portuguese-speaking Countries (CPLP)

Abstract

This article aims to examine the impact of tourism on economic growth, a panel co-integration from a community of Portuguese-speaking countries (CPLP). Being one of the leading sectors for economic development for most of the transaction economies, which helps bring down the unemployment rate, bring more foreign currency into the local economy, etc. Therefore, tourism is indispensable for GDP growth for any country; Thus, most of the leaders want to design the best policies as possible to boost this sector. So, the CPLP countries are not left behind when coming to an incentive more and more tourism. This work employs a Fully modified ordinary least squared (FMOLS) and dynamic ordinary least squared (DOLS) and a co-integration technique to test whether there’s a long-term association between expenditure on tourism and growth from 2000 to 2016. The FMOLS and DOLS outcomes show that travelers’ spending exerts a great influence on development for these nations and it causes the long-running association between tourism to growth, which provides that tourism exerts a positive influence on GDP. We conclude this article with some policy recommendations.