![Sample our Tourism, Hospitality and Events journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5950/TOC-Subject-Sample-2021-Tourism-Hospitality-Events.jpg"})
ABSTRACT
This paper examines the interactions between financial development and tourism growth for the case of Mauritius, a heavily tourism-dependent small island economy and one of the Africa’s best economic performers. Using dynamic regressions analysis over the period 1980–2018, namely, a Vector Error Correction Model which also accounts for endogeneity issues in tourism modelling, the results confirm that financial development is associated with tourism growth in the long run. The findings also show that economic growth, income of tourists as well as the availability of hotel rooms are important determinants of tourism. Moreover, it is observed that tourism development also leads to financial development thus confirming a bi-directional causality between these two variables. The bi-directional causality was also confirmed for the financial development–economic growth nexus as well as the tourism-growth nexus. Finally, evidence of the mediating role of economic development in the financial development–tourism development link is reported.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Other studies have analysed the link while principally analysing the tourism-financial development–growth link (see Kumar & Kumar, Citation2013 for the case of Fiji; Kumar (Citation2014) for Vietnam; Shahbaz et al., Citation2017 for Malaysia; Ohlan, Citation2017 for India and Tsaurai, Citation2018 for Africa) or tourism–financial development and Co2 Emission link (see Başarir & Çakir, Citation2015 for the case of Turkey and 4 EU and Işik et al., Citation2017 for Greece).
2 Mo et al. (Citation1993), using survey methodology, find that tourists prefer to travel to countries that have the same infrastructures as in their home country.
4 The results pass all post-estimation diagnosis tests related to normality, serial correlation and heteroscedasticity.