Tourism, Internet penetration and economic growth

ABSTRACT

This study examines the effect of tourism and Internet penetration on economic growth using a fixed-effects method of moments quantile regression. Both tourism and the Internet affect growth directly and indirectly as it complements other sectors of the economy. However, the effect can differ depending on the development of the economy. This study employs a dataset of 10 Association of South-East Asian Nations economies from the period of 1999–2017, as the region has implemented various joint-policies on tourism and Internet infrastructure development. The results show that both tourism and Internet penetration is positive and significant to growth and interacts positively to growth. However, the effect of tourism is weaker for developed economies, while the effect of Internet penetration is stronger for developed economies. Thus, tourism and Internet infrastructure policies must consider the economic development of an economy.

KEYWORDS:

• Economic growth
• Internet
• tourism
• tourism-led growth hypothesis
• ASEN

Acknowledgements

I acknowledge the direction of the handling editor and the suggestions provided by one anonymous referee.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Prior to the estimations, unit root tests were employed to examine whether the variables are I(0) and I(1) or trend stationary and dealt with accordingly. The following panel root tests were employed: LLC - Levin et al. (2002), Breitung - Breitung (2000), IPS - Im et al. (2003), Fisher-ADF and Fisher-PP - Choi (2001). The maximum number of lags is set to three using the Schwarz information criterion to determine the lag length. Results are available on request.