ABSTRACT
The extant tourism literature has identified a range of economic, geographic, political, and social factors impacting tourism demand. However, existing research has ignored how financial inclusion influences tourism demand, especially in the context of emerging markets and developing economies (EMDEs). We make an empirical contribution in this paper by being the first to distinctly capture the impact of financial inclusion on tourism demand for 85 EMDEs across the world, spanning the time-period of 1995–2017. Using various measures of financial inclusion, we find robust evidence to support our conjecture that higher financial inclusion strongly augments higher tourism demand in an unambiguous manner. Our results also show that the impact of financial inclusivity is not non-linear, implying that financial inclusion in its entirety plays a crucial role in supporting countries to generate more tourism revenues regardless of their levels of financial inclusion, which has significant policy implications.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
2 A selected set of studies that explore the empirical determinants of tourist flows include Martins et al. (Citation2017), Shafiullah et al. (Citation2019), Khalid, Okafor, and Shafiullah (Citation2020), Khalid, Okafor, and Sanusi (Citation2021), De Vita (Citation2014), Khalid, Okafor, and Burzynska (Citation2021), Okafor, Khalid, and Adeola (Citation2021), Okafor, Tan, and Khalid (Citation2021), Okafor, Khalid, and Burzynska (Citation2021).
3 Some recent studies exploring the importance of geographic factors in tourism demand include Manosuthi et al. (Citation2020), McKercher (Citation2018), and Czaika and Neumayer (Citation2020).
5 See Gopalan (Citation2018) for an overview and discussion about the distinction between financial depth and financial inclusion.
7 See Gopalan and Rajan (Citation2021) for a recent discussion of both the benefits and trade-offs involved in promoting digital financial inclusion.
8 This would be a promising avenue for future research subject to better data availability.
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Funding
This work was supported by United Arab Emirates University [Grant number UPAR grant (# 12B001)].
Notes on contributors
Sasidaran Gopalan
Sasidaran Gopalan is an Assistant Professor at the United Arab Emirates University. He received his Ph.D. from George Mason University, United States of America in 2014. His research falls under the intersections of applied macroeconomics, international economics, and development policy, with a broad focus on emerging markets.
Usman Khalid
Usman Khalid is an Assistant Professor at the United Arab Emirates University. He received his Ph.D. from Lund University, Sweden in 2016. His research interests include institutional economics, development economics, tourism economics, international trade, and economic growth.
https://orcid.org/0000-0002-7106-6168
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