New Evidence of Dynamic Links between Tourism and Economic Growth Based on Mixed-Frequency Granger Causality Tests

Han Liu, Haiyan Song

Research output: Journal article publicationJournal articleAcademic researchpeer-review

24 Citations (Scopus)

Abstract

The relationship between tourism and economic growth has created a large body of literature investigating the hypotheses of tourism-led economic growth (TLEGH) and economy-driven tourism growth (EDTGH). In this article, we use mixed-frequency Granger causality tests to investigate the relationship between the two types of growth in Hong Kong from 1974 to 2016. Our analysis reveals the following empirical regularities. First, the hidden short-run causality of TLEGH is detected, and EDTGH is proved in the short run and also in the long run when Granger causality tests are performed in a mixed-frequency framework. Second, mixed-frequency Granger tests demonstrate more power in testing the TLEGH and EDTGH via the rejection frequencies (bootstrap p value). Finally, rolling Granger causality tests reveal an unstable relationship between tourism and economic growth in both magnitude and direction, and the relationship is highly economic- and tourism-event-dependent.
Original languageEnglish
JournalJournal of Travel Research
DOIs
Publication statusAccepted/In press - 1 Aug 2017

Keywords

  • econometric model
  • Granger causality tests
  • mixed-frequency time series
  • tourism-led growth

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Transportation
  • Tourism, Leisure and Hospitality Management

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