The Contribution of Tourism Industry Cash Flows to Economic Growth “Middle East Evidence”
Abstract
This study aims to verify the extent to which the tourism sector contributes to economic growth measured by gross domestic income (GDP) in emerging countries. This study relied on the applied research method through correlation, simple and multiple regression. The study sample consisted of all tourism companies in Jordan. Quarterly Cash flows of tourism sector was traced from 2008-2021 and linked to GDP. The study reached the following conclusions, the simple regression confirmed the positive impact for all economic sectors including tourism sector on GDP; on the other hand, the multiple regression results for the joint influence of all sectors together on GDP only five sectors including tourism found with positive impact on GDP. Further evidence was found for the importance of tourism contribution to local income after excluding this sector from total earnings, the explanatory power of all sectors to GDP was decreased by 25%. The overall results of study recommended to give more attention to this sector in emerging economics particularly middle east countries.
References
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[32] Pratt, S. 2015. The economic impact of tourism in SIDS. Annals of Tourism Research, 52: 148- 160. DOI:https://doi.org/10.1016/j.annals.2015.03.005
[33] Ridderstaat, J., et al. 2014. Impacts of seasonal patterns of climate on recurrent fluctuations in tourism demand: evidence from Aruba. Tourism Management, 41: 245–256. DOI:https://doi.org/10.1016/j.tourman.2013.09.005
[34] Salleh, N. H. M., Othman, R., and Sarmidi, T. 2011. An analysis of the relationships between tourism development and foreign direct investment: An empirical study in selected major Asian countries, Int. Journal of Business and Social Science, 2: 250-257. DOI: https://doi.org/10.1177/1391561419858475
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[41] *** Central bank of Jordan, annual reports 2007-2021.
[42] *** Ministry of tourism (MOT) in Jordan annual reports 2007-2022.
[43] *** Tourism for Growth and Improved Live LaHood’s. World Bank Data Bank. World Development Indicators. [Online] Available from [Accessed 15 July 2019].
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[47] *** World Travel & Tourism Council “WTTC”. 2019. Travel & Tourism Economic Impact 2019. WTTC, London, U.K.
[2] Andriotis, K. 2002. Scale of hospitality firms and local economic development—evidence from Crete. Tourism Management, 23(4):333–341. DOI: https://doi.org/10.1016/S0261-5177(01)00094-2
[3] Asongu, SA. And Odhiambo, NM. 2018. ICT, financial access and gender inclusion in the formal economic sector: evidence from Africa. African Finance Journal, 20(2), 45 – 65. Available at: https://mpra.ub.uni-muenchen.de/92497/MPRA
[4] Balaguer, J., and Cantavella-Jorda, M. 2002. Tourism as a long-run economic growth factor: The Spanish case. Applied Economics, 34(7): 877–884. DOI: https://doi.org/10.1080/00036840110058923
[5] Banday, UJ, and Ismail, S. 2017. Does tourism development lead positive or negative impact on economic growth and environment in BRICS countries? A panel data analysis. Economic Bulletins, 37(1): 553–567. Available at: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I1-P50.pdf
[6] Barro, R. 2001. Determinants of economic growth. Cambridge, Mass. [u.a.]: MIT Press.
[7] Belloumi, M. 2010. The relationship between tourism receipts, real effective exchange rate and economic growth in Tunisia. Int J Tourism Research, 12(5): 550–560. DOI: https://doi.org/10.1002/jtr.774
[8] Bojanic, D.C. and Lo, M. 2016. A comparison of the moderating effect of tourism reliance on the economic development for islands and other countries. Tourism Management, 53(C): 207- 214. DOI:10.1016/j.tourman.2015.10.006
[9] Brida, J.G., and Pulina, M. 2010. A literature review on the tourism-led-growth hypothesis. Working paper CRENoS201017. Centre for North South Economic Research, Sardinia. Available at: https://www.researchgate.net/publication/254399592_A_literature_review_on_the_tourism-led-growth_hypothesis
[10] Cooper, R., and Barro, R. 1997. Determinants of Economic Growth: A Cross-Country Empirical Study. Foreign Affairs, 76(6): 154: 1-118. DOI: http://dx.doi.org/10.2307/20048292
[11] Croes R. 2006. A paradigm shifts to a new strategy for small island economies: embracing demand side economics for value enhancement and long term economic stability. Tourism Management, 27: 453–465. DOI: https://doi.org/10.1016/j.tourman.2004.12.003
[12] Dhungel, K.R. 2015. An econometric analysis on the relationship between tourism and economic growth: empirical evidence from Nepal. Int J Econ Financial Management, 3(2): 84–90. DOI:10.12691/ijefm-3-2-5
[13] Dowrick, S. 2004. Trade Openness and Growth: Who Benefits? Oxford Review of Economic Policy, 20(1): 38-56. DOI: 10.1093/oxrep/20.1.38
[14] Dwyer, L., and Forsyth, P. 2006. International Handbook on the Economics of Tourism. Cheltenham (UK): Edward Elgar.
[15] Fayissa, B., Nsiah, C., and Tadasse, B. 2008. Impact of tourism on economic growth and development in Africa, tourism economics, 14(4): 807-818. DOI: https://doi.org/10.5367/000000008786440229
[16] Fayissa, B., Nsiah, C., and Tadasse, B. 2009. Tourism and economic growth in Latin American countries (LAC): Further empirical evidence. Department of Economics and Finance Working Paper Series. Available from: http://www.capone.mtsu.edu/berc/working/TourismLAC03-5-09WP.pdf
[17] Frankel, J., and Rose, A. 2002. An Estimate of the Effect of Common Currencies on Trade and Income. The Quarterly Journal of Economics, 117(2): 437-466. DOI: 10.1162/003355302753650292
[18] Hassan MK, Sanchez B, and Yu JS. 2011. Financial development and economic growth: new evidence from panel data, Quarterly Review Economics Financing, 51(1): 88–104. Available at: http://www.sciencedirect.com/science/article/pii/S1062-9769(10)00064-5
[19] Henry, EW, and Deane, B. 1997. The contribution of tourism to the economy of Ireland in 1990 and 1995. Tourism Management, 18(8): 535–553. DOI: https://doi.org/10.1016/S0261-5177(97)00083-6
[20] Holzner, M. 2011. Tourism and economic development: The beach disease? Tourism Management, 32(4): 922-933. DOI: https://doi.org/10.1016/j.tourman.2010.08.007
[21] Huang, C., Tsaur, J.R., and Yang, C.H. 2008. Does world heritage list really induce more tourists? Tourism Management, 33(6): 1293-1616. DOI: 10.1016/j.tourman.2012.01.014
[22] Kadir, N., and Karim, MZA. 2012. Tourism and economic growth in Malaysia: evidence from tourist arrivals from Asean-S countries. Econ Res Ekonomiska istraživanja, 25(4): 1089–1100. DOI:https://doi.org/10.1080/1331677X.2012.11517550
[23] Krueger, A. 1980. Trade policy as an input to development. American Economic Review, 70: 188–292. DOI:10.3386/w0466
[24] Kuhn, TS. 1970. The structure of scientific revolutions. (2ndedn), University of Chicago Press, Chicago, USA.
[25] Lee, CC. and Chang, CP. 2008. Tourism development and economic growth: a closer look at panels. Tourism Management, 29(1): 180–192. DOI: https://doi.org/10.1016/j.tourman.2007.02.013
[26] Ma, E., Qu, C., Hsiao, A. and Jin, X. 2015. Impacts of China tourism law on Chinese outbound travelers and stakeholders: An exploratory discussion. Journal of China Tourism Research, 11(3): 229-237. DOI:https://doi.org/10.1080/19388160.2015.1077182
[27] McKinnon, RI. 1964. Foreign exchange constraints in economic development and efficient aid allocation. Economics Journal, 74(294): 388–409. DOI: https://doi.org/10.2307/2228486
[28] Oh C.O. 2005. The contribution of tourism development to economic growth in the Korean economy. Tourism Management, 26(1): 39–44. DOI: https://doi.org/10.1016/j.tourman.2003.09.014
[29] Orieqat, H., Saymeh, A.A.F. 2015. Is tourism a gene sector to Jordan’s GDP? International Journal of Development and Economic Sustainability, 3(5): 75-84. Available at: https://eajournals.org/wp-content/uploads/Is-Tourism-a-Gene-Sector-to-Jordan---s-Gdp.pdf
[30] Ozturk, I., and Acaravci, A. 2009. On the causality between tourism growth and economic growth: Empirical evidence from Turkey. The Transylvanian Review of Administrative Sciences, 25E, 73-81. Available at: https://www.semanticscholar.org/paper/On-the-Causality-Between-Tourism-Growth-and-Growth%3A-Ozturk-Acaravci/5f84959f5d98e8ecabfe5ec965cefb2655272509
[31] Payne, JE, and Mervar, A. 2010. Research note: the tourism-growth nexus in Croatia. Tourism Economics, 16(4): 1089–1094. DOI: https://doi.org/10.5367/te.2010.0014
[32] Pratt, S. 2015. The economic impact of tourism in SIDS. Annals of Tourism Research, 52: 148- 160. DOI:https://doi.org/10.1016/j.annals.2015.03.005
[33] Ridderstaat, J., et al. 2014. Impacts of seasonal patterns of climate on recurrent fluctuations in tourism demand: evidence from Aruba. Tourism Management, 41: 245–256. DOI:https://doi.org/10.1016/j.tourman.2013.09.005
[34] Salleh, N. H. M., Othman, R., and Sarmidi, T. 2011. An analysis of the relationships between tourism development and foreign direct investment: An empirical study in selected major Asian countries, Int. Journal of Business and Social Science, 2: 250-257. DOI: https://doi.org/10.1177/1391561419858475
[35] Savaş, B., Beşkaya, A., and Şamiloğlu, F. 2010. Analyzing the impact of international tourism on economic growth in Turkey. International Journal of Management, Economics and Business, 6(12): 121–136.
[36] Sofronov, B. 2017.The economic impact on global tourism. Annals of Spiru Haret University, Economic Series, Universitatea SpiruHaret, 17(2): 127-139. DOI: https://doi.org/10.26458/1728
[37] Songling, Y., Ishtiaq, M. and Bui ThiThanh, BT. 2019.Tourism Industry and Economic Growth Nexus in Beijing, China. Economies, 7(1): 1-15. DOI: https://doi.org/10.3390/economies7010025
[38] Szivas, E., and Riley, M. 1999. Tourism employment during economic transition. Annals Tourism Research, 26(4): 747–771. DOI: https://doi.org/10.1016/S0160-7383(99)00035-3
[39] Theobald, W. 2005. Global tourism. Burlington, MA: Elsevier Butterworth-Heinemann.
[40] Timothy, D. 2007. The political nature of cultural heritage and tourism. Aldershot, England: Ashg.
[41] *** Central bank of Jordan, annual reports 2007-2021.
[42] *** Ministry of tourism (MOT) in Jordan annual reports 2007-2022.
[43] *** Tourism for Growth and Improved Live LaHood’s. World Bank Data Bank. World Development Indicators. [Online] Available from [Accessed 15 July 2019].
[44] *** United Nations Conference on Trade and Development “UNCTAD”. 2013. Sustainable Tourism: Contribution to Economic Growth and Sustainable Development. D/B/C. I/EM.5/2.
[45] *** United Nations Environment Programme “UNEP”. 2011. Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication – A Synthesis for Policy Makers. UNEP. [Online] Available from [Accessed 20 August 2019].
[46] *** World Bank. 2016. World development Indicators, Washington, DC, The World Bank. www.worldbank.org/. http://hdl.handle.net/10986/23969
[47] *** World Travel & Tourism Council “WTTC”. 2019. Travel & Tourism Economic Impact 2019. WTTC, London, U.K.
Published
2023-06-30
How to Cite
ALADWAN, Mohammad.
The Contribution of Tourism Industry Cash Flows to Economic Growth “Middle East Evidence”.
Journal of Environmental Management and Tourism, [S.l.], v. 14, n. 4, p. 1915 - 1925, june 2023.
ISSN 2068-7729.
Available at: <https://journals.aserspublishing.eu/jemt/article/view/7886>. Date accessed: 22 dec. 2024.
doi: https://doi.org/10.14505/jemt.v14.4(68).03.
Section
Article
Copyright© 2024 The Author(s). Published by ASERS Publishing 2024. This is an open access article distributed under the terms of CC-BY 4.0 license.