Impact of Tourism on Long-Run Economic Growth of Vietnam

Abstract

Tourism is a potential industry as a new impetus for economic growth of Vietnam, and is identified as a key sector in Vietnamese economy, as such, the Vietnam government has identified the tourism industry as a key sector in the national economy and one of the crucial importance in securing its long-term growth. The study examines the role of tourism in driving the economic growth of Vietnam over the period of 1995-2013 by using Tourism-Led Growth Hypothesis (TLGH). The stability of TLGH is analyzed using a Rolling Window regression technique. The analyses performed in this study are based on an econometric methodology consisting of the pooled Ordinary Least Squares test, unit root test, co-integration analysis, and Granger causality test. The findings show that the TLGH is supported in the case of Vietnam. In other words, tourism has indeed played a key role in driving economic growth in Vietnam in recent decades. Moreover, the Rolling Window regression results confirm the stability of the TLGH in the case of Vietnam.