Research Note: Empirical Assessment of the Tourism-Led Growth Hypothesis — The Case of Vietnam

Abstract

This study examines the tourism-led growth hypothesis (TLGH) in Vietnam during the period 1992–2011. The authors use two-step procedures to test the hypothesis. They first apply cointegration and the Granger causality test to identify the relationships between tourism earning and gross domestic product (GDP). Second, they use growth decomposition methodology to measure the contribution of tourism to economic growth. The results indicate that it is worthwhile for the government to implement economic policies to stimulate economic growth through the tourism sector in Vietnam.

Testing tourism-led economic growth and economic-driven tourism growth hypotheses

“…However, the question of whether tourism indeed causes economic growth or economic growth actually contributes to international tourism has been inconclusive. Gunduz and Hatemi-J (2005), Proença and Soukiazis (2008), Cortés-Jimenez and Pulina (2010), Tang and Abosedra (2016), Belloumi (2010), Kreishan (2015), Hatemi-J (2015), Zhang and Gao (2016), Lean and Tang (2009), Kadir and Karim (2012), Trang, Duc, and Dung (2014), Fayissa, Nsiah, andTadesse (2011), Brida, Lanzilotta, Lionetti, andRisso (2010), and Brida, Pereyra, and Risso (2008) confi rm validity of tourism-led growth hypothesis (TLGH), while Payne and Mervar (2010), Bouzahzah and El Menyari (2013), Oh (2005), Kyophilavong, Gallup, Charoenrat, and Nozaki (2018) and Suresh and Senthilnathan (2014) reveal evidence of economic-driven tourism hypothesis (EDTH). On the other hand, Demiroz and Ongan (2005), Bilen, Yilanci, and Eryüzlü (2017), Tang and Ozturk (2017), Gautam (2011) and Khalil, Kakar, and Waliullah (2007) present validity of both hypotheses, more precisely, reciprocal relationship.…”

“…Lean and Tang (2010) supported TLGH in Malaysia, similar to the study of Kadir and Karim (2012) and proposed that the relationship is stable over time by incorporating the rolling subsample procedures into the Granger causality test. Trang et al (2014) investigated the same hypothesis in Vietnam during the period 1992-2011 using twostep procedures, Granger causality test and growth decomposition method and claimed support for TLGH hypothesis in Vietnam. Chen and Chiou-Wei (2009) argue that tourism-led economic growth hypothesis is supported for Taiwan while a reciprocal (bidirectional) causal relationship is found for South Korea.…”

“…,Jin (2011),Lean and Tang (2010),Kadir and Karim (2012),Trang et al (2014), Chen and Chiou-Wei (2009),Oh (2005) andKyophilavong et al (2018) have studied the relationship in selected East Asian countries. Of all the studies, all of them supported TLHG in respective countries, except the study of Jin…”

Tourism and economic growth in Asia: A bootstrap multivariate panel Granger causality

“…The researchers find that there is a reciprocal relationship between tourism and economic growth. The following destinations include Australia (Corrie, Stoeckl, & Chaiechi, 2013), Malaysia (Kadir & Jusoff, 2010;Lean & Tang, 2010;Othman et al, 2012;Tang, 2013), Pakistan (Khalil, Mehmood, & Waliullah, 2007), Vietnam (Trang & Duc, 2013;Trang, Duc, & Dung, 2014), China (Wang & Xia, 2013), Malta (Katircioglu, 2009), Austria (Othman et al, 2012), Singapore (Othman et al, 2012), Taiwan and South Korea (Chen & Chiou-Wei, 2009;Kim et al, 2006;Lee & Chien, 2008), Greece, and Mauritius (Dritsakis, 2004;Durbarry, 2004). However, the neutrality hypothesis implies that there are no spillover effects between tourism and economic development.…”

Critical success factors for tourism‐led growth

“…Because the dependent variable is qualitative, with only a simple dichotomy of "yes" versus "no," the qualitative variable can be represented by a dichotomous auxiliary variable (Gourieroux, 2000): (2012), Yurtseven (2012), Ertugrul and Mangir (2015), Coşkun and Özer (2014), Ay, Kartal, and Arslan (2015), Aslan (2015), Panahi, Mamipour, and Kaveh Nazari (2015) UAE Hatemi-J (2015) United Kingdom Charalambos (2013), Perez-Rodríguez et al (2015) Uruguay Brida, Lanzilotta, Leonetti, and Risso (2010) Vietnam (Thua Thien Hue Province) Trang and Duc (2013) Vietnam Trang, Duc, and Dung (2014)…”