CAUSALITY RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT AND TOURISM

Elma Satrovıc; Adnan Muslıja

doi:10.18092/ulikidince.418132

Research Article

CAUSALITY RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT AND TOURISM

Year 2019, Issue: 22, 65 - 76, 01.01.2019

Elma Satrovıc Adnan Muslıja

https://doi.org/10.18092/ulikidince.418132

Cited By: 8

Abstract

This paper applies panel data regression model to investigate the relationship between foreign direct investment (FDI) and tourism in 113 countries during the period 1995-2015. Besides this, the paper attempts to research the potential causal relationship and cointegration between tourism industry and FDI while controlling for indicators such as consumption, trade openness and human capital. The obtained results indicate a significant positive impact of tourism on FDI. Moreover, three control variables are reported to be a significant determinant of foreign direct investments. The unidirectional causal relationship running from tourism to FDI is reported, implying that tourism allows these countries to expand their FDI. Consumption, trade openness and human capital are also reported to have a unidirectional causal relationship with FDI. Westerlund ECM panel cointegration test indicates mixed results on the cointegration between variables. Taking into account the obtained results, government can consider this relationship as an important tool for policy implication to achieve sustainable growth of the economy as well.

Keywords

Tourism, Foreign direct investment, Cointegration, Causality, Relationship

References

Andergassen, R. and Candela, G. (2013). Less Developed Countries, Tourism Investments and Local Economic Development, Review of Development Economics, 17(1), 16-33.
Borensztein, E., de Gregorio, J. and Lee, J.W. (1995). How Does Foreign Direct Investment Affect Economic Growth? NBER Working Paper No. 5057.
Chen, X. (2010). The Influence of FDI on China’s Tourism Industry. Master thesis, source: http://aut.researchgateway.ac.nz/bitstream/handle/10292/904/ChenX.pdf?sequence=4&isAllowed=y
Dwyer, L., and Forsyth, P. (1994). Foreign Tourism Investment: Motivation and Impact, Annals of Tourism Research, 21(3), 512-537.
Kaur, H. and Sarin, V. (2016). Causality Relationship between GDP, FDI, Tourism: Empirical Evidence from India, I J A B E R, 14, 2605-2613.
Rajapakse, C.R. (2016). The Relationship between Foreign Direct Investment and Tourism Development: Evidence from Sri Lanka, International Journal of Research in Economics and Social Sciences, 6(5), 183-193.
Samimi, A.J., Sadeghi, S., Sadeghi, S. (2013). The Relationship between Foreign Direct Investment and Tourism Development: Evidence from Developing Countries, Institutions and Economies, 5(2), 59-68.
Sanford, D. M., and Dong, H. (2000). Investment in Familiar Territory: Tourism and New Foreign Direct Investment, Tourism Economics, 6(3), 205-219.
Satrovic, E. and Muslija, A. (2017). Foreign Direct Investments and Tourism: Empirical Evidence from Turkey, ICPESS Proceedings, 2, 88-100.
Selvanathan, E.A. and Viswanathan, B. (2009). Causality between Foreign Direct Investment and Tourism: Empirical Evidence from India, working paper, source: https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=ACE09&paper_id=230.
Walsh, J.P. and Yu, J. (2010). Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach. IMF Working Paper, source: https://www.imf.org/external/pubs/ft/wp/2010/wp10187.pdf.
Yazdi, S.K., Nateghian, N. and Rezaie, N.S. (2017). The Causality Relationships between Tourism Development and Foreign Direct Investment: An Empirical Study in EU Countries, Journal of Policy Research in Tourism, Leisure and Events, 9, 1-18.

CAUSALITY RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT AND TOURISM

Year 2019, Issue: 22, 65 - 76, 01.01.2019

Elma Satrovıc Adnan Muslıja

https://doi.org/10.18092/ulikidince.418132

Cited By: 8

Abstract

Bu çalışma, 1995-2015 döneminde 113 ülkede, doğrudan
yabancı yatırım (DYY) ve turizm arasındaki ilişkiyi incelemek için panel veri
regresyon modeli uygulanmıştır. Bunun yanı sıra, kâğıt tüketim, ticarete
açıklık ve insan sermayesi gibi göstergeleri denetlerken potansiyel nedensel
ilişki ve turizm endüstrisi ile DYY arasındaki eşşizliği araştırmaya
çalışmaktadır. Elde edilen sonuçlar, turizmin doğrudan yabancı yatırımlar üzerindeki önemli(olumlu) etkisini göstermektedir. Ayrıca, üç kontrol değişkeninin doğrudan yabancı yatırımların önemli bir belirleyicisi olduğu bildirilmektedir. Turizmden DYY'ye uzanan tek yönlü nedensel ilişki rapor edilmekte, bu da turizmin bu ülkelerin DYY'lerinin gelişmesine olanak sağladığını göstermektedir. Tüketim, ticaret açıklığı ve beşeri sermayenin de DYY ile tek yönlü bir nedensel ilişkiye sahip olduğu bildirilmektedir. Westerlund ECM paneli eş-bütünleşme testi, değişkenler arasında eş-bütünleşme üzerindeki karışık sonuçları gösterir. Elde edilen sonuçları göz önünde bulundurarak, hükümet bu ilişkiyi, ekonominin sürdürülebilir büyümesini sağlamak ve politika imaları için önemli bir araç olarak değerlendirebilmektedir.

Keywords

tourism, foreign direct investment, cointegration, causality, relationship

References

Andergassen, R. and Candela, G. (2013). Less Developed Countries, Tourism Investments and Local Economic Development, Review of Development Economics, 17(1), 16-33.
Borensztein, E., de Gregorio, J. and Lee, J.W. (1995). How Does Foreign Direct Investment Affect Economic Growth? NBER Working Paper No. 5057.
Chen, X. (2010). The Influence of FDI on China’s Tourism Industry. Master thesis, source: http://aut.researchgateway.ac.nz/bitstream/handle/10292/904/ChenX.pdf?sequence=4&isAllowed=y
Dwyer, L., and Forsyth, P. (1994). Foreign Tourism Investment: Motivation and Impact, Annals of Tourism Research, 21(3), 512-537.
Kaur, H. and Sarin, V. (2016). Causality Relationship between GDP, FDI, Tourism: Empirical Evidence from India, I J A B E R, 14, 2605-2613.
Rajapakse, C.R. (2016). The Relationship between Foreign Direct Investment and Tourism Development: Evidence from Sri Lanka, International Journal of Research in Economics and Social Sciences, 6(5), 183-193.
Samimi, A.J., Sadeghi, S., Sadeghi, S. (2013). The Relationship between Foreign Direct Investment and Tourism Development: Evidence from Developing Countries, Institutions and Economies, 5(2), 59-68.
Sanford, D. M., and Dong, H. (2000). Investment in Familiar Territory: Tourism and New Foreign Direct Investment, Tourism Economics, 6(3), 205-219.
Satrovic, E. and Muslija, A. (2017). Foreign Direct Investments and Tourism: Empirical Evidence from Turkey, ICPESS Proceedings, 2, 88-100.
Selvanathan, E.A. and Viswanathan, B. (2009). Causality between Foreign Direct Investment and Tourism: Empirical Evidence from India, working paper, source: https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=ACE09&paper_id=230.
Walsh, J.P. and Yu, J. (2010). Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach. IMF Working Paper, source: https://www.imf.org/external/pubs/ft/wp/2010/wp10187.pdf.
Yazdi, S.K., Nateghian, N. and Rezaie, N.S. (2017). The Causality Relationships between Tourism Development and Foreign Direct Investment: An Empirical Study in EU Countries, Journal of Policy Research in Tourism, Leisure and Events, 9, 1-18.

There are 12 citations in total.

Details

Primary Language	English
Journal Section	Articles
Authors	Elma Satrovıc Adnan Muslıja This is me
Publication Date	January 1, 2019
Published in Issue	Year 2019 Issue: 22

Cite

APA	Satrovıc, E., & Muslıja, A. (2019). CAUSALITY RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT AND TOURISM. Uluslararası İktisadi Ve İdari İncelemeler Dergisi(22), 65-76. https://doi.org/10.18092/ulikidince.418132