Dynamic spillover effects among tourism, economic growth and macro-finance risk factors
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Dynamic spillover effects among tourism, economic growth and macro-finance risk factors Syed Jawad Hussain Shahzad 1,2
& Román
Ferrer 3
Received: 17 February 2018 / Accepted: 5 September 2019/ # ISEG – Instituto Superior de Economia e Gestão 2019
Abstract This paper examines spillover effects among international tourism growth, economic growth and a group of major macroeconomic and financial variables in the US. The empirical results show significant interactions among tourism growth, economic growth and the selected macro-finance factors, which have notably increased following the intensification of the global financial crisis in the fall of 2008. Furthermore, international tourism growth in the US appears as the main net receiver of spillovers from macroeconomic factors, thus providing evidence contrary to the empirical validity of the tourism-led growth hypothesis for the US. However, real GDP growth is identified as a net transmitter of spillovers to the tourism growth, which supports, at least partly, the economic-driven tourism growth hypothesis for the US. Novel to the literature, global economic policy uncertainty is the most important transmitter of shocks to US tourism growth, suggesting that heightened uncertainty about economic policy may have especially harmful effects on international tourism flows. Keywords Tourism growth . Economic growth . Economic policy uncertainty . Tourism-
led growth hypothesis . Spillover effects
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10258-01900165-0) contains supplementary material, which is available to authorized users.
* Syed Jawad Hussain Shahzad [email protected] Román Ferrer [email protected]
1
Department for Management of Science and Technology Development, Ton Duc Thang University, Ho Chi Minh City, Vietnam
2
Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City, Vietnam
3
Department of Actuarial and Financial Economics, University of Valencia, Valencia, Spain
S. Shahzad, R. Ferrer
1 Introduction Over the last decades, tourism has experienced a global boom to become one of the biggest and fastest-growing sectors in the world economy. The importance of the tourism industry stems from the fact that it can contribute to economic growth through a variety of channels. First and foremost, tourism is a key generator of foreign exchange earnings, employment and income for numerous countries. Moreover, it produces increased tax revenues for governments, allows firms to exploit economies of scale and helps to boost several economic sectors in a country, such as construction, agriculture, food processing, furniture manufacturing and culture. In addition, tourism activity stimulates local competition, investment in physical infrastructure and it encourages technical and human capital development. According to data of the World Travel and Tourism Council (2017), in 2016 travel and tourism generated 10.2% of global GDP (US$ 7.6 trillion) and provided over 292 million
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