Title

Moderation effects of political instability and tourism on economic growth

Document Type

Journal Article

Publication Title

Tourism Analysis

Publisher

Cognizant Communication Corporation

School

School of Business and Law / Markets and Services Research Centre (MASRC)

RAS ID

35632

Comments

Saha, S., Yap, G., & Kim, Y. R. (2022). Moderation effects of political instability and tourism on economic growth. Tourism Analysis, 27(2), 173-185. https://doi.org/10.3727/108354221X16187814403092

Abstract

This study examines the impacts of inbound tourism on economic growth by using panel system-generalized-methods-of-moments techniques for over one hundred countries during the period 1995-2016. Using political instability as a moderator variable, the evidence shows that inbound tourism alone can lead to economic growth along with an increase in the standard control variables such as capital formation, education, and R&D expenditure. Nevertheless, a significant adverse effect on economic growth is revealed in the presence of medium to high political instability. The marginal impact of inbound tourism on economic growth with a high level of political instability is more detrimental in low-income countries than in their counterparts. Developing countries, which are heavily reliant on tourism, suffer more severe damages to economic growth when there is increasing political instability. Therefore, the analysis concludes that political stability is one of the key players in sustainable tourism development and economic growth.

DOI

10.3727/108354221X16187814403092

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