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Journal of Applied Sciences
  Year: 2012 | Volume: 12 | Issue: 12 | Page No.: 1245-1254
DOI: 10.3923/jas.2012.1245.1254
 
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Analysis of Causal Relationship Between Tourism Development, Economic Growth and Foreign Direct Investment: an ARDL Approach

R. Othman, N.H.M. Salleh and T. Sarmidi

Abstract:
This study investigated the relationship between the development of tourism industry (ARR), economic growth (GDP) and foreign direct investment (PLA) in 18 major international tourism destinations. Utilizing autoregressive distributed lag (ARDL) methodology; this study finds that there is a long run relationship between variables in this study. This study also indicates the existence of multi-directional relation between all three variables. ARR was found more significant Granger cause to the GDP. GDP was also found a Granger cause to ARR. The bidirectional relationship between ARR and GDP exist in United Kingdom, Malaysia, Singapore, Austria, Turkey, Netherland and Canada. Bidirectional relationship between ARR and PLA was found in French, Mexico, China and Hong Kong, while bidirectional relationship between PLA and GDP being recorded for Austria and Mexico. Research findings also show PLA and GDP variables do not have any relationship in many countries studied. There is a fairly strong relationship between variables ARR of GDP as compared to the relationship between ARR and the PLA variables and the relationship between the PLA and the GDP variables.
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How to cite this article:

R. Othman, N.H.M. Salleh and T. Sarmidi, 2012. Analysis of Causal Relationship Between Tourism Development, Economic Growth and Foreign Direct Investment: an ARDL Approach. Journal of Applied Sciences, 12: 1245-1254.

DOI: 10.3923/jas.2012.1245.1254

URL: https://scialert.net/abstract/?doi=jas.2012.1245.1254

COMMENTS
21 May, 2014
ssingh:
very useful and lucid presentation of the ideas.
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