| dc.description.abstract | The relationship between tourism development and economic growth is often described by the
tourism-led growth hypothesis (TLGH). It has been a contemporary issue in the tourism
economics literature, which has gained momentum over the past couple of years. There is
consensus that the broader economy is affected by tourism expansion through several channels,
which include: foreign currency earnings; creation of employment; direct, indirect and induced
effects on production; and income. However, the nature of the relationship between tourism
development and economic growth remains inconclusive.
This study contributes towards the debate on the link between tourism development and
economic growth by: (i) investigating evidence in support of the TLGH for African countries;
and (ii) exploring evidence of the preconditions for the successful implementation of the TLGH
in Africa. The methodology employed in the research consists of three approaches: (i) a review
of theoretical and empirical literature on the economic growth theory, the tourism-led growth
hypothesis and the critical success factors for tourism development; (ii) an empirical
investigation of the evidence of the TLGH for African countries using both a production
function and a neoclassical growth function specification; and (iii) exploring the critical
success factors for tourism-led growth empirically.
The evidence of tourism-led growth is investigated using cross section and panel data analyses
for 53 African countries from 1995 to 2013. A typical production function specification with
capital, labour and three different proxies of tourism was used to estimate the effect of tourism
on production. Country and region specific factors were included using dummy variables. A
neoclassical growth model specification was then employed where output growth was
regressed against initial gross domestic product, physical capital, human capital, tourism
exports, commodity exports, trade openness and dummy variables which captured country and
region specific effects.
The results showed that the determinants of economic growth in Africa are human capital, total
factor productivity, commodity metal exports and non-economic effects. Tourism was initially
weak or of minimal importance in explaining the differences in the economic growth of African
countries. Over time, tourism became increasingly significant for economic growth in the
region. he study further modelled the conditions under which tourism development can contribute to
economic growth. 116 research articles for 47 countries were presented indicating the evidence
for or against the TLGH. The dependent variable in the analysis is dichotomous and takes the
value of 1 where the evidence shows that tourism led to growth for a specific country. Using
cross section and panel data from 1995-2013, logistic regressions were performed to determine
the factors that contribute to the success of the TLGH. The results showed these to be human
capital, financial sector development, tourism safety and security, protection of the
environment, trade openness and technological development.
The study makes several contributions to tourism economics literature. The study is the first
one to include almost all African countries in empirically testing evidence of the TLGH. The
study is also the first one to employ both a production function and growth specification to find
robust evidence of the influence of tourism on production and growth. Finally, the study does
not simply prescribe tourism growth as a cure for Africa’s economic growth problems, but goes
a step further to identify the conditions under which tourism can positively affect economic
growth in Africa. | en_US |
