Tourism and Development in Developing Economies: A Policy Implication Perspective

Abstract

Tourism is considered a competent driver of development in emerging economies. This study assesses the role of tourism in shaping the fundamental pillars of development in developing economies by targeting the case of Pakistan. Various econometric techniques and approaches were used to investigate the causal relationships of tourism with economic growth, energy and agriculture development, and poverty. This study highlights the important role of tourism in the development of emerging economies. The findings of our study suggest that a 1% increase in tourism significantly enhances gross domestic product (GPD) by 0.051%, foreign direct investment by 2.647%, energy development by 0.134%, and agriculture development by 0.26%, and reduces poverty by 0.51% in the long run. Hence, policy-makers should be informed that through public interventions, tourism can advance development by the design and implementation of integrated policies in developing economies. In addition, policy consistency and coherence are essential for competitiveness, sustainability, and maximizing benefits from tourism.

Revisiting the Dynamics of Tourism, Economic Growth, and Environmental Pollutants in the Emerging Economies—Sustainable Tourism Policy Implications

“…Tourism development is used as a tool for employment generation, SMEs development, and economic growth in the developing economies [44]. Several developing countries have attempted to enhance economic growth through the export of material goods, but they have often proved less useful due to a lack of competitiveness [4].…”

“…Several developing countries have attempted to enhance economic growth through the export of material goods, but they have often proved less useful due to a lack of competitiveness [4]. Developing economies are using tourism as an export item to remain competitive and earn foreign exchange for balancing their trade deficit [44]. Literature trends indicate unidirectional, bidirectional, and no causal relationship between tourism and economic growth [45].…”

“…Tourism is considered as a determinant of foreign direct investment (FDI) [44]. FDI plays an active role in the development of the tourism industry.…”

Does Tourism Boost Economic Growth: Evidence from Italy

“…Further, they found dual causality running between tourist expenditure and economic progress. Khan et al (2020) highlighted the importance of tourism in the expansion of emerging economies, while Adamopoulos and Thalassinos (2020) studied tourism and economic growth in the G-6 countries.…”

Sustainability of Agritourism Activity. Initiatives and Challenges in Romanian Mountain Rural Regions

“…It is true that tourist activity, in general, does not always mean sustainability for a region, as it could sometimes cause damage to the environment, but as agritourism is concerned, it promotes the idea of combining the economic interests with the sustainable development of communities, and also with the conservation of nature. Hence, starting from the consideration that sustainability encourages those actions that support the economic purposes of rural settlements, but with a strong emphasis on harmonious environmental principles, we can state, with the help of other specialists [28][29][30][41][42][43][44][45][46], that agritourism is, in our times, a chance perhaps to ensure both economic development of rural settlements and the "health" of the environment, in other words to achieve the sustainability of rural regions.…”