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Mixed frequency evidence of the tourism growth relationship in small Island developing states: a case study of Tonga

Kumar, Nikeel and Chandra, Ravinay A. and Patel, Arvind (2021) Mixed frequency evidence of the tourism growth relationship in small Island developing states: a case study of Tonga. Asia Pacific Journal of Tourism Research, 26 (3). pp. 294-307. ISSN 1094-1665

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    Abstract

    In this study, we examine the effect of tourism on economic growth in Tonga. We apply Ghysels Beta-MIDAS approach to estimate the elasticity of tourism, identify breaks with the multiple break test, and test for causality using the mixed frequency VAR approach. We utilize a sample from 1995 quarter 1 to 2018 quarter 4. The results indicate that the long-run effect of tourism is 0.06. Two structural breaks are identified, and both have negative growth effects. Unidirectional causality from tourism to real per-capita GDP is noted. The findings indicate that Tonga’s economic growth can be improved by promoting tourism.

    Item Type: Journal Article
    Subjects: H Social Sciences > HD Industries. Land use. Labor
    Divisions: Faculty of Business and Economics (FBE) > School of Accounting and Finance
    Depositing User: Ms Shalni Sanjana
    Date Deposited: 27 May 2021 14:20
    Last Modified: 27 May 2021 14:20
    URI: http://repository.usp.ac.fj/id/eprint/12790
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