The Effects of International Tourism Receipts on Economic Growth: Evidence from the First 20 Highest Income Earning Countries from Tourism in the World (1996-2016)

In this study, the effects of tourism receipts on economic growth will be investigated econometrically for the top 20 countries earning most from international tourism (WTR-20) in the world for the period 1996-2016. From this aspect, this study aimed to empirically evaluate whether international tourism receipts have an effect on economic growth performances of the developed and developing countries in the WTR-20 group as proposed by theoretical literature under the tourism-led growth hypothesis. To determine the effects of international tourism receipts on economic growth for WTR-20 group countries, a model is an extended form of Cobb-Douglas type of production function, will be estimated under the second-generation panel data analysis considering cross-sectional dependence. As a result of the study, it is determined that international tourism revenues have a positive and statistically significant effect on economic growth in the WTR-20 group countries. Also, it is found that there was unilateral causality running from international tourism receipts to economic growth in the WTR-20 group countries. These findings, which are in keeping with the theoretical literature under the tourism-led growth hypothesis, indicate that international tourism receipts have a significant effect on providing economic growth and gaining sustainability in WTR-20 group countries with their current structures.