Causality Between Foreign Direct Investment and Tourism: Empirical Evidence from India

Selvanathan, Saroja; Selvanathan, Eliyathamby A.; Viswanathan, B.

doi:10.3727/108354212x13330406124296

Cited by 72 publications

(64 citation statements)

References 9 publications

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“…Hence, most governments in developing countries often place the highest priority on attracting FDI for further tourism tourisms and economic growth (Andergassen & Candela, 2009;Zhang, Chong, & Ap, 1999;Zhao & Olsen, 1997). Therefore, there is a causal relationship between FDI and tourism tourisms, with FDI improving the quantum and quality of service, and then the international tourism numbers increase (Selvanathan, Selvanathan, & Viswanathan, 2012).…”

Section: Literature Reviewmentioning

confidence: 99%

The causality relationships between tourism development and foreign direct investment: an empirical study in EU countries

Yazdi

Nateghian

Rezaie

2017

Journal of Policy Research in Tourism, Leisure and Events

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The main focus of this paper is the impact of foreign direct investment (FDI), official exchange rate and trade on international tourism using panel data of 27 countries over 1995-2014. The result based on the pooled mean group estimator of dynamic panels shows that there is no causality relationship between FDI and tourist receipts and a bidirectional causality relationship between real exchange rate, trade openness and tourist receipts and explains that FDI plays a significant role in expanding the tourism sector in EU countries. The appropriate policies to explore tourism resources and plans which develop new tourist venues and facilities may need to be considered in order to meet the increasing tourism receipts. RESUMENEl principal objetivo de este trabajo es el impacto de la inversión extranjera directa, el tipo de cambio oficial y el comercio en el turismo internacional utilizando datos de panel de 27 países en el periodo 1995-2004. El resultado basado en el estimador Promedio de Grupos Agrupado (pooled mean group-PMG) para datos de panel dinámico muestra que no hay relación de causalidad entre la inversión extranjera directa (FDI) y la recepción de turistas y sí una relación de causalidad bidireccional entre el tipo de cambio real, la apertura comercial y la recepción de turistas que explica que la inversión extranjera directa juega un papel significativo en el desarrollo del sector turístico en los países de la UE. Las políticas apropiadas para explorar los recursos turísticos y los planes que desarrollarán nuevos emplazamientos turísticos e instalaciones pueden necesitar ser consideradas con el fin de responder a crecientes niveles de recepción de turistas. RÉSUMÉ

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Section: Literature Reviewmentioning

confidence: 99%

The causality relationships between tourism development and foreign direct investment: an empirical study in EU countries

Yazdi

Nateghian

Rezaie

2017

Journal of Policy Research in Tourism, Leisure and Events

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“…Most of the research has proved a one-way causal relationship between F.D.I. and tourism growth (Bezić et al, 2010;Samimi, Sadeghi, & Sadeghi, 2013;Selvanathan, Selvanathan, & Viswanathan, 2012;Tang, Selvanathan, & Selvanathan, 2007). There is also one-way causality running from tourism growth to F.D.I.…”

Section: Review Of Literaturementioning

confidence: 99%

Tourism foreign direct investment led tourism gross value added: a co-integration and causality analysis of Croatian tourism

Bezić

Radić

2017

Economic Research-Ekonomska Istraživanja

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The purpose of this study was to investigate the causal relationship between foreign direct investment in tourism and tourism gross value added in Croatia. The study employed econometric techniques, such as the unit root test, Johansen co-integration, and the Granger causality test, in a vector error correction model (V.E.C. model), and the Toda-Yamamoto causality test in a vector autoregressive model (V.A.R. model), using quarterly time-series data from 2000(1) to 2012(4). The results confirm the existence of a stable co-integrated relationship between variables in the long term. A short-term relationship was also proved between foreign direct investment in tourism and gross value added, using the Toda-Yamamoto causality test. By including control variables, the two-way causality between the subject variables was proven using the Granger causality test.

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“…One is from the perspective of tourism industry, usually in the VAR or VECM theory framework, using Ranger Causality method to test the relationship. Conclusions suggest the long-term existence of bilateral equilibrium and the two-way causality [2] [3] [4] [5] [6]. These papers only focusing on tourism-related sector FDI (such as hotels, restaurants, transportation, etc.…”

Section: Review Of Domestic and Foreign Literaturesmentioning

confidence: 99%

China’s Tourism-Led Foreign Direct Investment Inflows: An Empirical Study

Chen¹

2017

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Based on the annual data of China from 2000 to 2014, this paper applies the dynamic panel model to study the relationship between inbound tourism and foreign direct investment (FDI). Compared with previous literatures, our analysis is not limited to the study of FDI in single tourism sectors such as hotels and restaurants, but takes general FDI into consideration. The empirical results show that the growth of inbound tourism can not only promote FDI flow into the tourism industries, but also increase the inflows of FDI to other sectors. In other words, the flourished inbound tourism may have spillover impacts of FDI on non-tourism sectors. It's also indicated that the two policies of inbound tourism improvement and inward FDI promotion are complementary. Therefore, I believe coordination can maximize the effect of policies, because the two policies may coordinate with each other to achieve economic growth targets.

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Causality Between Foreign Direct Investment and Tourism: Empirical Evidence from India

Cited by 72 publications

References 9 publications

The causality relationships between tourism development and foreign direct investment: an empirical study in EU countries

The causality relationships between tourism development and foreign direct investment: an empirical study in EU countries

Tourism foreign direct investment led tourism gross value added: a co-integration and causality analysis of Croatian tourism

China’s Tourism-Led Foreign Direct Investment Inflows: An Empirical Study

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