Tourism and Economic Growth in G10 Countries: Evidence From an Asymmetric Panel Causality Test

This study proposes an asymmetric panel causality test to analyze the relationship between tourist arrivals and economic growth. To this end, annual data over the period 1995–2017 are examined for the G10 countries. The findings demonstrate that the relationship between tourism and economic growth varies according to positive and negative shocks. In terms of positive shocks, tourism development causes economic growth. The study also finds a bidirectional causality relationship between the negative shocks of the variables. Therefore, positive developments in tourism contribute to economic growth, while negative events in tourism impede growth. In sum, tourism is strongly linked to economic activities in G10 countries, and thus policymakers should attach importance to the tourism sector in order to support sustainable development