Effect of tourism on economic growth of Sri Lanka: accounting for capital per worker, exchange rate and structural breaks

Stauvermann, Peter Joseph and Kumar, Ronald Ravinesh and Shahzad, Syed Jawad Hussain and Kumar, Nikeel (2016) Effect of tourism on economic growth of Sri Lanka: accounting for capital per worker, exchange rate and structural breaks. Economic Change and Restructuring. ISSN 1573-9414

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Official URL: https://link.springer.com/article/10.1007/s10644-0...

Abstract

We explore the nexus between tourism, exchange rate and economic growth in Sri Lanka over the period 1980–2014. Using the augmented Solow (Q J Econ 70(1):65–94, 1956) framework and the ARDL bounds procedure whilst accounting for structural breaks using Bai and Perron (J Appl Econ 18(1):1–22, 2003) multiple break tests, the short-run and long-run association and impacts are examined. The results confirm the presence of a long-run association between tourism receipts (% of GDP), exchange rate, capital per worker and output per worker. The regression results show a 1% increase in tourism receipts results in a 0.03 and 0.06% increase in output per worker in the short-run and long-run, respectively. A unidirectional causality is noted from tourism to output per worker; from exchange rate to output per worker and capital per worker; and from output to capital, in per worker terms. Finally, we note that although structural breaks periods have negative association with economic growth, they are not statistically significant.

Item Type: Article
Additional Information: Full text this article is not available in this repository.
Uncontrolled Keywords: tourism; economic growth; elasticity; cointegration; casuality; structural breaks; Sri Lanka
Subjects: H Social Sciences > HB Economic Theory
Divisions: Bolton Business School > Bolton Business School
Depositing User: Sarah Taylor
Date Deposited: 20 Dec 2016 11:25
Last Modified: 20 Dec 2016 11:25
Identification Number: 10.1007/s10644-016-9198-6
URI: http://ubir.bolton.ac.uk/id/eprint/1030

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