Tourism Development in BRICS: Unraveling the Role of Foreign Direct Investment & Trade

Abstract

This article presents the findings of a study that utilized a panel ARDL (autoregressive distributive lag) model to scrutinize the association of foreign direct investment (FDI), trade, human capital, government expenditures, with tourism in the BRICS nations. The research analyzed data spanning the period from 1995 to 2020 and unveiled crucial insights into the dynamics influencing tourism development in these countries. The results revealed that FDI, trade, and human capital demonstrated positive associations with the tourism sector, in the short and long time period. These factors played a significant role in boosting tourism activities within the BRICS (Brazil, Russia, China, India & South Africa) nations. However, an inverse correlation was observed between government expenditures and tourism during the same time frame, suggesting the need for careful allocation and optimization of public funds to enhance the sector's growth and performance. This study sheds light on the complex interplay between various determinants of tourism development in BRICS countries, providing valuable implications for policymakers and industry stakeholders.