Empirical Economics

, Volume 50, Issue 2, pp 679–696 | Cite as

Tourism and growth in Lebanon: new evidence from bootstrap simulation and rolling causality approaches

Article

Abstract

A multivariate model incorporating tourist arrivals, real output, and the real exchange rate is estimated to study the causal relationship between tourism and economic growth in Lebanon. This study covers the monthly data from January 1995 to December 2011. The Granger causality between the variables of interest is determined using the TYDL bootstrap causality approach. Then, we apply the Granger causality with rolling regression technique to evaluate the stability of the tourism-led growth hypothesis in Lebanon. We find that the tourism-led growth hypothesis is supported empirically in the case of the Lebanese economy. Meanwhile, we also find some evidences of uni-directional Granger causality running from the real exchange rate to tourism and economic growth in Lebanon. Therefore, tourism can be used a policy instrument to stimulate long-term economic growth in Lebanon.

Keywords

Bootstrap causality Rolling causality Tourism-growth Lebanon 

JEL Classification

C32 O11 O53 

Notes

Acknowledgments

We would like to thank the three anonymous reviewers and Robert M. Kunst (coordinating editor of the Empirical Economics) for their constructive comments and suggestion given on the earlier draft of this research paper. We are also very grateful to Abdulnasser Hatemi-J for providing the GAUSS routines to conduct the leveraged bootstrap causality test and the multivariate ARCH test. Any flaws and omissions that remain in this research paper are of our own responsibility.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.Centre for Policy Research and International StudiesUniversiti Sains MalaysiaUSMMalaysia
  2. 2.College of Business AdministrationAmerican University in the EmiratesDubaiUAE

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