Testing tourism-led growth hypothesis in Laos?

Abstract

Purpose

The purpose of this paper is to investigate the tourism-led growth hypothesis in Laos.

Design/methodology/approach

The authors test the tourism-led growth hypothesis using autoregressive distributed lag (ARDL) cointegration estimation (Pesaran et al., 2001) and Granger causality tests.

Findings

The results of this paper show that when tourism is forcing variable, there is no long-run relationship between tourism development and economic growth. The Granger causality test demonstrates that there is a uni-directional causality running from economic growth in tourism.

Social implications

The empirical results and policy recommendation may be useful for other small developing countries.

Originality/value

This study is the first study to investigate the relationship between tourism development and growth in Laos, using a relatively new econometric approach – ARDL bound testing.

Citation

Kyophilavong, P., Gallup, J.L., Charoenrat, T. and Nozaki, K. (2018), "Testing tourism-led growth hypothesis in Laos?", Tourism Review, Vol. 73 No. 2, pp. 242-251. https://doi.org/10.1108/TR-03-2017-0034