Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Anatolia: An International Journal of Tourism and Hospitality Research Volume 17, Number 2, pp. xx-xx. 2006 Copyright © 2006 anatolia Printed in Turkey. All rights reserved 1303-2917/06 $20.00 + 0.00 Contribution of Tourism to Economic Growth: A Panel Data Approach UMMUHAN GÖKOVALI Mugla University Faculty of Economics and Administrative Sciences Department of Economics 48170 Kötekli, Mugla Turkey E-mail: [email protected] OZAN BAHAR Mugla University Faculty of Economics and Administrative Sciences Department of Economics 48170 Kötekli, Mugla Turkey E-mail: [email protected] ABSTRACT Tourism is one of the fastest growing sectors of the world economy. Tourism development may promote economic growth both directly and indirectly, first by stimulating the growth of other sectors and second by increasing domestic incomes and effective demand. The commonly accepted argument on the contribution of tourism in economic growth needs to be verified empirically as well. This paper empirically investigates whether the tourism led-growth hypothesis holds for the Mediterranean countries for the period of 19872002. A panel data approach is utilized and coefficient estimates are obtained by using fixed effect and random effect models. As a result, the hypothesis that tourism is conducive to economic growth is verified based on the regression results. On the whole, the empirical findings reveal that traditional factors (capital and labor) as well as a tourism related factor contribute to economic growth for the Mediterranean countries under focus. Key words: Economic growth, Panel data approach, Mediterranean countries. Ummuhan Gökovalı is a faculty member in the Faculty of Business Administration and Economics, Mugla University, Turkey. She obtained her undergraduate degree in Economics from Ankara University, Turkey (1992). She holds a Masters degree in Economics from Oklohoma State University, USA (1996) and a PhD degree from METU, Turkey (2003). She is specialised on IPRs, economics of innovation, and economic growth/development. Ozan Bahar is a faculty member in the Faculty of Business Administration and Economics, Mugla University, Turkey. He obtained his undergraduate degree from the Military Academy (1992). He holds both Masters (2000) and PhD (2005) degrees in Economics from Mugla University. His area of interest includes international economics, regional development, tourism economics, and competitiveness. Volume 17 n Number 2 n Winter 2006 n 5 Contribution of Tourism to Economic Growth: A Panel Data Approach INTRODUCTION Contemporary growth of tourism is the gradual consequence of the increase of wealth in societies and the greater availability of goods and services that were once considered to be the luxury. Tourism activities that used to be limited to those who are rich and have plenty of spare time, now have become a way of life, and a consumption habit for many people in both the developed and the developing world. Tourism is regarded as a leading sector for the 21st century (Giles and Perry 1998) due to its significant share in the world economy. Moreover, according to the World Tourism Organization (WTO), the tourism sector is the largest sector in the world in terms of income generation and employment creation (Lundberg, Stavenga and Krishnamoorthy 1995). In 2006, tourism sector is expected to contribute 10.3% to GDP and to generate 11.8% of total exports (The World Travel and Tourism Council- WTTC 2006). Tourism sector employment is estimated at 234,305,000 jobs in 2006 accounting 8.7% of total employment (WTTC 2006). The continuous growth of international tourism, declined between 2002 and 2003 by 1.7% to 691 million people and 523 billion dollar in 2003. Kester (2004) puts forth three reasons for this decline. These are, the Iraq war that took place in 2003; the SARS illness that appeared in Asia; and overall degeneration in the world economies experienced in the recent years. Nevertheless, the growth of the tourism sector in the last few decades is beyond doubt, considering that the number of tourists over the world was 25.3 million in 1950, and has increased 2631% in 53 years (approximately 27 times). Economically, such massive growth is a major objective for both developed and developing countries. Most importantly, tourism sector contributes to national income, increases employment, ensures more egalitarian income distribution (Marcouiller, Kim and Deller 2004), has a positive effect on balance of payments, improves technology and knowledge transfers, encourages foreign investment, acts as a catalyst for economic development, and contributes to peace through cultural interaction (Han and Fang 1997; Göymen 2000). Table 1 presents tourism receipts, the number of tourist arrivals and the rate of economic growth for the Mediterranean countries as well as the percentage share with respect to world tourism activities. The Mediterranean area serves 34.3% of world tourists and obtains 32.4% of current world tourism receipts. The number of tourists visiting the area was 237.1 million in 2003. This is an increase of 81% compared to that in 1987. Tourism receipts reached 169.9 billion dollars with a significant increase of 224% since 1987. In 2003, the Mediterranean area was second in a�racting tourists a�er Europe, which received 57.7% of tourist movements (WTO 2004; 2005). Similarly, the Mediterranean area holds the biggest bed capacity in the world a�er Europe and the USA, with a share of 25% (Ekin Yazım Grubu 2003) . Although, there is no general trend in growth rates, the growth rate of 9 countries out of 15 declined in the year of 2003 compared to that of 1987. While the growth rate of 5 countries increased for the same period. 2 n Anatolia: An International Journal of Tourism and Hospitality Research Ummuhan Gökoval - Ozan Bahar Table 1. Tourism receipts and tourist arrivals for mediterranean countries Countries Tourism Receipts (Billion $) Tourist Arrivals (Billion) 1987 1990 1995 2000 2003 Albania - 0,070 0,070 0,389 Algeria 0,100 0,064 0,032 0,096 Croatia 1,668 2,774 1,511 Cyprus 0,666 1,258 1,586 1,994 Egypt France Gibraltar 11,870 20,185 1987 1990 1995 2000 2003 1987 2003 0,522 - 0,030 0,040 0,032 0,041 -8 6 0,161 0,778 1,137 0,520 0,866 1,166 -1 7 2,758 6,376 8,907 7,880 1,485 5,831 7,409 - - 2,020 2,134 2,243 0,949 1,561 2,100 2,686 2,303 7 4 2,950 4,657 4,704 1,671 2,411 2,871 5,116 5,746 3 3 31,300 30,981 37,038 36,974 52,497 60,033 77,190 75,048 3 0 - - - Greece 2,268 2,587 Israel 1,342 1,382 Italy 12,174 20,016 GDP Growth (annual %) - - 0,123 0,132 - - - 4,180 9,262 10,842 7,564 8,873 10,130 13,096 13,969 -2 4 3,490 4,571 1,379 1,063 1,063 7 1 30,400 27,493 31,222 25,749 26,679 31,052 41,181 39,604 3 0 2,379 2,215 2,417 Libya 0,003 0,006 0,004 0,097 0,079 0,097 0,096 0,056 0,174 0,142 - - Malta 0,327 0,495 0,818 0,754 0,856 0,746 0,872 1,116 1,216 1,127 4 -2 Monaco - - - - - 0,214 0,245 0,233 0,300 0,235 - - Morocco 0,936 1,259 1,470 2,284 3,369 2,248 4,024 2,602 4,240 4,552 -3 5 2,145 3,555 5,650 6,027 7,886 6,102 8,020 9,511 12,097 11,707 6 -1 27,500 33,833 45,967 32,900 37,441 34,920 47,898 51,830 6 2 Portugal Spain 14,760 18,593 Syrian 0,204 0,300 1,338 1,082 1,147 0,493 0,562 0,815 1,416 2,788 2 3 Tunisia 0,672 0,953 1,840 1,977 1,935 1,875 3,204 4,120 5,058 5,114 7 6 Turkey 1,721 3,308 4,957 7,636 13,203 2,468 4,799 7,083 9,586 13,341 9 6 Mediterranean 52,4 78,7 119,5 136,0 169,9 131,2 161,5 170,9 230,4 237,1 - World 172 269 401 475 523 360 451 564 686 691 - Share (%) 30.4 29.2 29.8 28.6 32.4 36.4 35.8 30.3 33.5 34.3 - Source: WTO and WDI (various issues) Despite the fact that the tourism industry plays a crucial role in the world economy, applied economists have given li�le a�ention to the empirical investigation of tourism’s contribution to economic growth. This study focuses on the Mediterranean countries and investigates whether tourism has any effect on economic growth in these countries. In this regard, the major contribution of this paper is to utilize a panel data approach to investigate whether tourism contributes to economic growth for the Mediterranean countries. For this purpose, this study has established a role for tourism alongside traditional factors such as capital and labor. The second section provides a brief literature review on the relation between tourism and economic growth. The model and the data with the estimation techniques and estimation results are discussed in the third section. The fourth section is reserved for a number of concluding remarks. Volume 17 n Number 2 n Winter 2006 n 3 Contribution of Tourism to Economic Growth: A Panel Data Approach LITERATURE REVIEW Export-led growth studies will be informative for the assessment of the effects of tourism on economic growth. Export-oriented growth implies that an expansion in the volume of export increases the foreign currency inflow, thus generating an increase in the national income. In other words, real GNP increases as a result of increasing external demand for domestic goods and services depending on the amount of increase in exports. An expansion in exports has positive effect on the economy through various channels, among which are: gains from scale economies and positive externalities; lessening of foreign exchange constraint thus facilitating imports of intermediary goods; enhancement of the competitiveness of domestic firms; stimulation of research and development and of investment in new technologies (McKinnon 1964; Balassa 1978; Krueger, Larry and Monson 1981; Thirlwall 2000). Within this framework, numerous studies in the literature examine the causal relationship between exports and economic growth (e.g., Feder 1983; Ram 1985; Ram 1987; Ukpolo 1994; Ghatak, Milner and Utkulu 1995; Eusufzai 1998; Shan and Sun 1998; Al-Yousif 1999; Bernard and Jensen 1999). Though the findings of these studies vary, by and large, they demonstrated that exports have a positive impact on economic growth, that is an improvement or expansion in exports leads to a proportional increase in economic growth. According to this line of thinking, if we see tourism development as an integral part of overall economic development, the relationship between tourism exports and economic growth will be an indicator of the positive effect of tourism on economic growth (Vanegas and Croes 2003; Croes 2006). As it stands, exports provide an external monetary resource for the economy of a country, therefore, the revenue obtained from foreign tourists can be perceived as an export of countries (Lundberg, Stavenga and Krishnamoorthy 1995). Consequently, countries with rich natural, historical, and cultural a�ractions would use the tourism industry to acquire foreign currency, which in turn provides significant support for industrialization of the country. Therefore, it is considered that tourism will contribute positively to economic growth, in line with the hypothesis of export-oriented economic growth (Lee and Kwon 1995; Sinclair 1998; Lim and McAleer 2000; Sharpley 2002; Mansfeld and Winckler 2004). Furthermore, besides the direct income effect, tourism sector generates multiplier effects and contributes to the development of other sectors in the country, such as construction, transportation, textiles, agriculture, and fishery (Crompton, Lee and Shuster 2001; Tyrrell and Jonhston 2001). Despite the rising importance of the tourism sector all over the world, tourism development in relation to economic growth has not been investigated much in the literature. A few existing studies on the issue of tourism’s contribution to economic growth provide contradictory findings. Copeland (1991) argues that the tourism sector is one of the most important sources of economic growth and development for many countries. In his general equilibrium international trade model, the increase in the number of foreign visitors can enhance the welfare of the country, if the price of non-tradable goods 4 n Anatolia: An International Journal of Tourism and Hospitality Research Ummuhan Gökoval - Ozan Bahar and services increases in an economy without taxes, foreign ownership, and distortions (Copeland 1991). Hazari and Sgro (1995) investigate the relationship between growth and tourism, capital accumulation, consumption per capita, and terms of trade. Their findings reveal that tourism contributes to the long-term growth rate, especially for small countries. While many theories emphasize the importance of tourism for economic growth, there are also contrary arguments. Hazari and Ng (1993) suggest that tourism can decrease economic welfare and have a negative effect on economic growth under monopolistic circumstances. Nowak et al. (2004) argue that under certain conditions a ‘tourist boom’ can lead to a decrease in welfare and manufacturing output and thereby ‘immiserize’ the residents of a country. Although there is contradictory theoretical evidence about the positive impact of tourism on economic development and growth, this is not the case for the empirical evidence. Most of the empirical studies found out that tourism affects economic growth positively (see Table 2). The hypothesis that tourism improves economic growth is verified for four Caribbean countries (Modeste 1995) and Mauritius (Durbarry 2004). Additional empirical evidence comes from Spain. Empirical investigation confirms that there is a long-term relationship between tourism receipts and economic growth, and tourism affects economic growth positively in Spain (Balaguer and Jorda 2002). Furthermore, similar findings are observed for Turkey; Yıldırım and Öcal (2004) provide evidence that in the long-term, tourism promotes economic growth in Turkey, but this relationship does not exist in the short term. Empirical findings of Brau et al. (2003) also support the positive association hypothesis. For a sample of 14 countries it is found that for developing countries the relation holds to a significant extent. In a panel se�ing for Latin American countries, the hypothesis is confirmed for low- and middle-income countries (Martin et al., 2004). The economic effects of tourism were calculated for Fiji and the results reveal that a 10% increase in the expenditure of tourists will lead to a 0.5% increase in GDP, 0.72% increase in real consumption, and 0.67% increase in real national welfare (Narayan 2004). However, there is also empirical evidence that contradicts the positive relationship between tourism and economic growth. The hypothesis that tourism leads to economic development was rejected for Korea (Oh 2005). Campos and Sequeira (2005) utilizing a panel technique found that in general there is no significant contribution of tourism to economic growth within a sample of 509 countries. MODEL AND DATA SET There is an extended literature concerned with the estimation of growth models. Although there is no single growth model to utilize, most of the models include investment shares, labor force, and human capital as explanatory variables . Labor force is one of the main determinants of growth rate of countries producing output. Similarly, capital formation is another major force behind Volume 17 n Number 2 n Winter 2006 n 5 Study Data Set Dependent Variable Technique Independent Variables Martin, Morales and Scarpa (2004) Time series 1985-98 for 21 Latin American countries GDP per capita Panel data Oh (2005) Time series 1975-2001 for Korean Real GDP ADF tests for cointegration, F-test for Granger causality in VAR model Real aggregate tourism receipts Rejection of the hypothesis Durbarry (2004) Time series 1970-1999 for Mauritius Real GDP OLS Physical capital, human capital, real tourism receipts per tourist and real export Support for the hypothesis Balaguer and Jorda Time series 1975-97 for Spain Real gross domestic product ADF tests for cointegration, F-test for Granger causality in VAR model International tourism earnings and real effective exchange Support for the hypothesis Campos and Sequeira (2005) Time series 1980-99 for 509 observations Growth rate of per capita GDP Panel data Tourist arrivals, tourism returns (%) and tourism returns (USD) Rejection of the hypothesis Modeste (1995) Time series and crosssection 198192 and 197592, 4 Caribbean countries Growth in per capita GDP OLS with dummy variables (LSDV) Growth in tourism output per head Support for the hypothesis Brau, Lanza and Pigliaru (2003) Time series 1980-1995 for 14 small countries within a sample of 143 countries Average annual real per capita GDP growth OLS crosscountry Per capita GDP 1980, share of trade in GDP 1980-95, standard deviation of growth rates 1980-95 and average share of tourism receipts in GDP 1980-95 Support for the hypothesis Yıldırım and Öcal (2004) Time series 1962-2002 for Turkey GNP VAR model Real tourism revenues, real savings to proxy for investment and labor force Support for the hypothesis Rate of growth of tourists per capita, gross domestic investment, public spending on education, Contribution of Tourism to Economic Growth: A Panel Data Approach general government Table 2. A selection of empirical studies on the tourism-led growthconsumption hypothesis (2002) Conclusion Support for the hypothesis Source: Compiled from Authors economic growth and investment towards capital formation promotes economic growth as well. Capital formation can be distinguished into two broad categories; physical capital and human capital. In addition to investment in physical capital, investment in human capital contributes to economic growth. Most importantly, a well developed labor force with educational attainment and health facilities is able to produce more for a given resource base (Lucas 1988; Romer 1990; Barro 1991, 1995; Benhabib and Spiegel 1994). Our model includes these ‘core’ variables, as well as a proxy for a tourism-related variable to test the hypothesis that tourism contributes to economic growth 6 n Anatolia: An International Journal of Tourism and Hospitality Research Ummuhan Gökoval - Ozan Bahar for Mediterranean countries. The model to be estimated includes gross fixed capital formation as a percentage of GDP (GFCFGDP), tourism receipts as a percentage of exports (TOUEX), and the growth of the labor force (GLF) as explanatory variables for the growth rate of GDP (GGDP). All data comes from the World Bank (WDI, 2005) except for the tourism receipts data, which come from the World Tourism Organization. The data set is a panel made up of 13 Mediterranean countries and 16 years beginning from 1987 to 2002. The econometric model to be estimated is, GGDP= ß0 +ß1 (GFCFGDP) + ß2 (TOUEX) + ß3 (GLF) + u Estimation Techniques A panel estimation technique is used when the data set combines both time series and cross sections . The main advantage of a panel data set over a cross section is that it permits greater flexibility in modeling differences in behavior across observation units (Greene 2000: 559-60)- in this case, countries. The framework is, yit= αi + β’xit+ εit (1) In equation (1), αi is an individual effect which is constant over time t (t =1987,…, 2002) and specific to the cross-sectional unit i (i =1.., 13). There are K regressors in xit, excluding the constant term, with ?it as the error term. As it stands, equation 1 is a classical regression model. There are two basic approaches to generalize this model. These are the fixed-effect and the randomeffect approaches. In the first case, ?i is taken as a group of specific constant terms in the regression model, while in the la�er case, ?i is treated as a group specific disturbance. The fixed effect model assumes that differences across units can be captured in as differences in the constant term. Let yi and Xi be the T observations for the unit i, and let εi be an associated Tx1 vector of disturbances. Hence, the following equation is estimated for the fixed effect model; yit= αi + β’xit+ εit (2) ?i and ? are parameters to be estimated. On the other hand, the random effects model can be formulated as: yit= α + β’xit+ ui + εit (3) In equation (3), there are K regressors in addition to the constant term. ui is the random disturbance characterizing observation i and is constant through Volume 17 n Number 2 n Winter 2006 n 7 Contribution of Tourism to Economic Growth: A Panel Data Approach time. In random effects specification, it is assumed that individual effects are uncorrelated with the other regressors, E (Xu) =0. This hypothesis is the basis for the Hausman test, which tests random versus fixed effects. The Hausman test is a test of choice between fixed and random effect models under the hypothesis of no correlation between individual effects and the regressors. If the hypothesis is rejected, then the fixed effect estimator is more efficient. The fixed effects model is the appropriate specification if the focus is on a specific set of units; whereas the random effects model is a more appropriate specification if the focus is on n number of units that are randomly drawn from a large population (Baltagi 1995). Estimation Results Table 3 shows regressions for growth rates of GDP. Since heteroscedasticity could be an important problem across countries, the standard errors for the coefficients are based on a heteroscedacticity-consistent covariance matrix. The result for the pooled ordinary least squares (OLS) regression is reported for comparison purposes with respect to fixed (FE) and random effects (RE) models. In all three estimations, the F test confirms that coefficients are jointly different from zero and significant. The RE model is selected by the Hausman test over the FE model. Estimation results indicate that there are significant first-order auto-correlations in the FE and RE models. Since auto-correlation may be serious problem, we corrected for auto-correlation and the corrected estimation results are given in Table 4. Despite the auto-correlation in estimations reported in Table 3, the resulting changes in the parameter estimates and standard errors are quite modest when the autocorrelation is corrected (Table 4). The Hausman test again favors RE over FE. Furthermore, significant growth differences were not observed across the different periods that are not accounted for by capital, labor and tourism variables. Hence, regressions that include time effects are not reported for space considerations. According to the estimation results in Table 4, all estimates have the expected sign, and coefficients are jointly and significantly different from zero. Since the Hausman test indicates the selection of a random effect model, only RE estimation results are discussed. RE estimation results indicate that proxies for labor, capital, and tourism affect the economic growth rate positively for the period between 1987 and 2002, for the selected Mediterranean countries. Moreover, even though there is evidence for auto-correlation; there is not much difference between the value of the coefficients of the results of FE and RE. While a 1% increase in investment share of GDP increases the growth rate by around 13%, a 1 point increase in the growth of the labor force increases 8 n Anatolia: An International Journal of Tourism and Hospitality Research Ummuhan Gökoval - Ozan Bahar Table 3. Estimation Results Variables OLS Levels Fixed Effects Random Effects GFCFGDP 0.129 (0.063)** 0.21 (0.078)** 0.149 (0.066)** GLF 0.328 (0.169)* 0.631 (0.5) 0.34 (0.2)* TOUEX 0.066 (0.03)** 0.083 (0.062) 0.065 (0.034)* F Tests 5.7 (3, 204)** 2.36 (15, 192)** 2.361 (15, 192)** Hausman test 3.18 AR(1) -2.646** -3.792** -3.021** AR(2) 2.479** 1.606 2.211 Dependent variable: Growth rate of GDP. Notes: (1) Figures in italics under the coefficient estimates are heteroscedasticity consistent standard errors. Figures in parenthesis are degrees of freedom. Asterisks * and ** indicate statistical significance at the 10% and 5% levels, respectively. (2) AR(1) and AR(2) are tests for first-order and second-order serial correlations, asymptotically N (0,1). Table 4. Auto-correlation corrected estimation results Variables OLS Levels Fixed Effects Random Effects GFCFGDP 0.124 (0.064)* 0.214 (0.079)** 0.132 (0.065)** GLF 0.373 (0.171)** 0.735 (0.522) 0.377 (0.179)** 0.082 0.15 0.082 (0.032)** (0.072)** (0.033)** 6.78 (3, 191)** 2.47 (15, 179)** 2.472 (15, 179)** TOUEX F Tests Hausman test 5.54 Dependent variable: Growth rate of GDP. Notes: Figures in italics under the coefficient estimates are heteroscedasticity consistent standard errors. Figures in parenthesis are degrees of freedom. Asterisks * and ** indicate statistical significance at the 10% and 5% levels, respectively. 1) In classification of Mediterranean destination some European countries are included as well like France, Italy, Spain, Portugal and Greece. WTO (2005:96) makes the comparisons between these two regions despite the fact that some countries are counted in both regions. So it should be kept in mind that these two regions share some countries while making comparisons. 2) Unfortunately there is no available time series data on human capital for Mediterranean countries, hence we were not able to include human capital in our regression. 3) Countries included in the regression are Algeria, Egypt, France, Greece, Israel, Italy, Malta, Morocco, Portugal, Spain, Syria, Tunisia, and Turkey. Croatia, Cyprus, Gibraltar, Libya and Monaco are excluded from the analysis due to unavailability of the data on some of the core variables. 4) This part is mostly borrowed from Greene (2000) 5) We have used tourism receipts as a percentage of GDP as an alternative explanatory variable. However, the coefficient on this variable is not significant. It is only significant at 14% level. Neither the sign nor the significance level of the coefficients on other explanatory variables change when tourism receipts as a percentage of GDP is included. Volume 17 n Number 2 n Winter 2006 n 9 Contribution of Tourism to Economic Growth: A Panel Data Approach the growth rate by around 0.4 point. When the share of tourism receipts as a percentage of exports increases by 1%, the growth rate of GDP increases by 8% . The hypothesis that tourism affects income growth is therefore accepted for Mediterranean countries for the period considered. CONCLUSIONS AND IMPLICATIONS The fact that tourism is one of the rapidly growing sectors of the world economy is beyond doubt. The development of the tourism sector not only increases economic growth directly, but also stimulates the growth of other sectors through backward and forward linkages and increases domestic incomes and effective demand. Since the tourism sector plays a major role in economies, it is crucial to empirically verify the positive relation hypothesis as is commonly accepted. Verification of this hypothesis leads to very important policy consequences. Once the positive relationship is verified, governments need to become actively involved in fostering the tourism sector. Tourism can be especially important for developing countries where foreign exchange earnings are a constraint on import of raw and investment goods for industrialization. Drawing on the experience of the Mediterranean countries, the empirical investigation of tourism’s contribution to growth for the period 1987-2002 indicates that traditional factors (capital and labor) as well as tourism-related factors are conducive to economic growth. These findings are important due to the scarcity of scholarly research that explains economic growth in terms of traditional and tourism-related factors for the Mediterranean countries. More specifically, acceptance of the positive relation hypothesis and acceptance of tourism-led growth have implications for formulating tourism based development policies. As far as long-term and sustained growth is concerned, in addition to investment in traditional factors, investment in tourism and well-planned tourism operations are important to maximize tourism earnings. However, tourism related policies should be carefully designed so as to operate with an infrastructure that is conducive to the tourism sector. Policy makers should be careful in designing policies, especially in weighing up the share of investment between tourism and other productive sectors. A highly promoted tourism sector can lead to ‘immiserizing growth’ since tourism is a highly volatile sector open to exposure by external factors and shocks, leaving a country in poor economic conditions. This study can be extended in several directions. First, in this paper, we are unable to include a human capital variable in our regressions due to unavailability of data. Hence, a future research agenda involves more empirical investigation when data for human capital variable is available. Also, our study is restricted to Mediterranean countries, thus future research could focus on other tourism-specialized countries, so that regional comparison could be done in terms of to what extent tourism contribute to growth. 10 n Anatolia: An International Journal of Tourism and Hospitality Research Ummuhan Gökoval - Ozan Bahar REFERENCES Al-Yousif, Y. K. (1999). On the Role of Exports in the Economic Growth of Malaysia: a Multivariate Analysis, International Economic Journal, 13(3): 67-75. Balassa, B. (1978). Exports and Economic Growth: Further Evidence, Journal of Development Economics, 5 (2): 181-189. Balaguer, J. and Jorda, M. C. (2002). Tourism as a Long-run Economic Growth Factor: the Spanish Case, Applied Economics, 34: 877-884. Baltagi, B. (1995). Econometric Analysis of Panel Data. NY: John Wiley. Barro, R. J. (1991). Economic Growth in a Cross-Section of Countries, Quarterly Journal of Economics, 106(2): 407-443. Barro, R. J. (1995). Determinants of Economic Growth. London: MIT Press. Benhabib, J. and Spiegel M. M. (1994). The Role of Human Capital in Economic Development Evidence from Aggregate Cross-Country Data, Journal of Monetary Economics, 34: 1-30. Bernard, A.B. and Jensen, J.B. (1999, May). Exporting and Productivity, 2005 from h�p:// www.nber.org/papers/ w7135, pp 1-39. Brau, R., Lanza, A. and Pigliaru, F. (2003, September). How Fast are the Tourism Countries Growing? The Cross-Country Evidence, 2005 from h�p://www.feem. it/web/activ/_wp.html, pp 1-23. Campos, C. and Sequeira, T. N. (2005). Tourism and Economic Growth: A Panel Data Approach, International Conference: Theoretical Advances in Tourism Economics, University of Évora, Portugal, 18-19 March 2005. Copeland, B. R. (1991). Tourism, Welfare and De-industrialization in a Small Open Economy, Economica, 58: 515-529. Croes, R. R. (2006). A Paradigm Shi� to a New Strategy for Small Island Economies: Embracing Demand Side Economics for Value Enhancement and Long Term Economic Stability, Tourism Management, (Article in Press). Crompton, J. L., Lee, S. and Shuster, T.J. (2001). A Guide for Undertaking Economic Impact Studies: the Springfest Example, Journal of Travel Research, 40(1): 79-88. Durbarry, R. (2004). Tourism and Economic Growth: the Case of Mauritius, Tourism Economics, 10(4): 389-401. Ekin Yazım Grubu (2003). Turizm Yıllığı 2002 Yılı Verileri. Istanbul: Ekin Yayinevi. Eusufzai, Z. (1998). Do More Open Countries have a Higher Growth Rate but More Inequality?, Atlantic Economic Journal, 26(1): 32-44. Feder, G. (1983). On Exports and Economic Growth, Journal of Development Economics, 12(1-2): 59-73. Ghatak, S., Milner, C. and Utkulu, U. (1995). Trade Liberalisation and Endogenous Growth: Some Evidence for Turkey, Economics of Planning, 28: 147-167. Giles, A. R. and Perry, A. H. (1998). The Use of a Temporal Analogue to Investigate the Possible Impact of Projected Global Warming on the UK Tourist Industry, Tourism Management, 19(1): 75-80. Göymen, K. (2000). Tourism and Governance in Turkey, Annals of Tourism Research, 27(4): 1025-1048. Greene, W. H. (2000). Econometric Analysis. New Jersey: Prentice Hall. Han, X. and Fang, B. (1997). Measuring the Size of Tourism and Its Impact in an Economy, Statistical Journal of the United Nations Economic Commission for Europe, 14(4): 357-379. Hazari, B. R. and Ng, A. (1993). An Analysis of Tourists’ Consumption of Non-traded Goods and Services on the Welfare of the Domestic Consumers, International Review of Economics and Finance, 2: 3-58. Hazari, B.R. and Sgro, P.M. (1995). Tourism and Growth in a Dynamic Model of Trade, The Journal of International Trade and Economic Development, 4(2): 243-252. Volume 17 n Number 2 n Winter 2006 n 11 Contribution of Tourism to Economic Growth: A Panel Data Approach Kester, J. G. C. (2004). WTO World Tourism Barometer and Preliminary Results for International Tourism in 2003, Tourism Economics, 10(1): 102-119. Krueger, A. O., Larry, H.B. and Monson, T.D. (1981). Trade and Employment in Developing Countries. Chicago: University of Chicago Press. Lee, C. and Kwon, K. (1995). Importance of Secondary Impact of Foreign Tourism Receipts on the South Korean Economy, Journal of Travel Research, 34: 50-54. Lim, C. and McAleer, M. (2000). A Seasonal Analysis of Asian Tourist Arrivals to Australia, Applied Economics, 32: 499-509. Lucas, R. E. (1988). On the Mechanics of Economic Development. Journal of Monetary Economics, 22(1):3-42. Lundberg, E. D., Stavenga, M. H. and Krishnamoorthy, M. (1995). Tourism Economics. Canada: John Wiley. Mansfeld, Y. and Winckler, O. (2004). Options for Viable Economic Development Through Tourism Among the Non-oil Arab Countries: the Egyptian Case, Tourism Economics, 10(4): 365-388. Marcouiller, D. W., Kim, K. K. and Deller, S. C. (2004). Natural Amenities, Tourism and Income Distribution, Annals of Tourism Research, 31(4): 1031-1050. Martin, J. L., Morales, N. M. and Scarpa, R. (2004, February). Tourism and Economic Growth in Latin American Countries: a Panel Data Approach, 2005 from h�p: //www. feem. it/ Feem /Pub /Publications/WPapers/default.htm, pp 1-20. McKinnon, T. (1964). Foreign Exchange Constraint in Economic Development and Efficient Aid Allocation, Economic Journal, 74: 388-409. Modeste, N. C. (1995). The Impact of Growth in the Tourism Sector on Economic Development: the Experience of Selected Caribbean Countries, Economia Internazionale, 48: 375-385. Narayan, P. K. (2004). Economic Impact of Tourism on Fiji’s Economy: Empirical Evidence from the Computable General Equilibrium Model, Tourism Economics, 10(4): 419-433. Nowak, J., Sahli, M. and Sgro, P.M. (2004, February). Tourism, Trade and Domestic Welfare, 2005 from h�p: //www. feem.it/Feem/Pub/Publications/WPapers/default.htm, pp 1-31. Oh, C. (2005). The Contribution of Tourism Development to Economic Growth in the Korean Economy, Tourism Management, 26: 39-44. Ram, R. (1985). Exports and Economic Growth: Some Additional Evidence, Economic Development and Cultural Change, 33(2): 415-425. Ram, R. (1987). Exports and Economic Growth in Developing Countries: Evidence from Time Series and Cross-Section Data, Economic Development and Cultural Change, 36(1): 51-72. Romer, P. (1990). Endogenous Technological Change, Journal of Political Economy, XCVIII:71-102 Shan, J. and Sun, F. (1998). On the Export-led Growth Hypothesis: the Econometric Evidence from China, Applied Economics, 30: 1055-1065. Sharpley, R. (2002). The Challenges of Economic Diversification Through Tourism: the Case of Abu Dhabi, International Journal of Tourism Research, 4(3): 221-235. Sinclair, M. T. (1998). Tourism and Economic Development: a Survey, The Journal of Development Studies, 34(5): 1-51. Thirlwall, A. P. (2000). Trade, Trade Liberalisation and Economic Growth: Theory and Evidence, African Development Bank, Economic Research Papers, 63: 1-30. Tyrrell, T. J. and Jonhston, R. (2001). A Framework for Assessing Direct Economic Impacts of Tourist Events: Distinguishing Origins, Destinations and Causes of Expenditure, Journal of Travel Research, 40(1): 94-101. Ukpolo, V. (1994). Export Composition and Growth of Selected Low-income African Countries: Evidence from Time Series Data, Applied Economics, 26: 445-449. Vanegas, M. and Croes, R. R. (2003). Growth, Development and Tourism in a Small Economy: Evidence from Aruba, International Journal of Tourism Research, 5(5): 315-330. 12 n Anatolia: An International Journal of Tourism and Hospitality Research Ummuhan Gökoval - Ozan Bahar Yıldırım, J. and Öcal, N. (2004). Tourism and Economic Growth in Turkey, Ekonomik Yaklasim, 15(52-53): 131-141. WDI (2005). h�p://www.worldbank.org WTO (2004). Tourism Highlights. Madrid, Spain. WTO (2005). Tourism Market Trends: Europe 2004 Edition. Madrid, Spain. WTTC (2006). The 2006 Travel & Tourism Economic Research. London. WTO (various issues, 1987-2005). Compendium of Tourism Statistics. Madrid. Submi�ed : 05 January 2006 Resubmi�ed : 06 April 2006 Resubmi�ed : 24 April 2006 Accepted : 02 May 2006 Refereed anonymously Volume 17 n Number 2 n Winter 2006 n 13