Governance, FDI and tourism in top 10 tourist destinations in Africa

Abstract

The study examines the impact of foreign direct investment (FDI) and governance quality on tourism demand in selected 10 African countries. We further examine the role of governance quality in the FDI-tourism demand nexus. The study employs panel data of 10 most preferred tourist countries in Africa over a period of 1995–2019. These data are sourced from World Bank Development Indicators and World Bank Governance Indicators’ Database. Panel unit root tests, Johanson-Fisher Cointegration Test and panel cointegrating regression are employed. The results reveal that there is a long run relationship among the variables and FDI has a positive and significant impact on tourism. Similarly, the quality of governance improves the level of tourism arrivals. In addition, quality governance plays a significant role in the tourism sector of the selected countries in Africa. The policy implications are as well discussed.

Keywords:

• Africa
• cointegration
• governance
• tourism

JEL Classification Codes:

• C23
• F41
• O19

Disclosure statement

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

Additional information

Notes on contributors

Tolulope T. Osinubi

Tolulope T. Osinubi, is a lecturer in Economics, Obafemi Awolowo University (OAU), Ile-Ife, Osun state Nigeria. She holds PhD in economics from OAU. Her area of research interests include: Tourism, Development and Gender Economics.

Folorunsho M. Ajide

Folorunsho M. Ajide, is a lecturer in Economics, University of Ilorin, Ilorin, Nigeria. He holds PhD in Economics from Obafemi Awolowo University, Ile-Ife, Nigeria. He is a chartered accountant(ACA), member of Chartered Institute of Taxation of Nigeria (ACT I) and Full member of Nigerian Economic Society (FNES). His area of research interests include: Business Economics, Financial, Development and Economics of Entrepreneurship.

Olufemi B. Osinubi

Olufemi Osinubi, is a lecturer in Department of Hospitality and Tourism Management in Federal polytechnic, Ede. His area of interest include: Tourism management and hospitality research.