Tourism Led Growth: Evidence from Time-Series Data

The empirical debate on the role of international tourism on local economic growth is
inconclusive and is characterized by two main opposing views: the Tourism-led economic
growth hypothesis and the Economy-driven tourism growth hypothesis. The objective of
the study was to establish the role of tourism development on economic growth using time
series secondary data from Zimbabwe. Empirically, the study develops a tourism-growth
model that is an extension of Solow (1956) neoclassical growth function and attempts to
determine whether there is the long-run and short-run relationship via Autoregressive
Distributed Lag (ARDL) model and Granger technique. The main finding of this study is
the Tourism-led economic growth hypothesis can be accepted in Zimbabwe both in shortrun
and long-run periods. The study findings have empirically verified the presence of the
Tourism-led economic growth hypothesis in Zimbabwe. Tourism could be an effective
substance for the sustainable growth of the country’s economy and a strategy to help
Zimbabwe recover from Covid-19 economic effect. They showed that tourism is in part an
endogenous growth process, requiring a systematic allocation of resources by government
to sustain its effect on local economies. Further, the country can ease visa and border
crossing processes as well as eradicate insecurity for sustainable tourism and economic
development