International tourism and economic growth: the case of Morocco and Tunisia

Abstract

This study proposes to examine the impact of tourism activity on the economic growth of Morocco and Tunisia. We contribute here to the empirical literature on the tourism-led growth hypothesis (TLGH), by adopting the error correction model framework, the cointegration and Granger causality tests between real tourism receipts, real effective exchange rate and economic growth in Morocco and Tunisia, for the annual period 1980–2010; two main results emerge from this analysis. First, contrary to the predictions of the TLGH, the Granger test results show that this hypothesis is only valid for short term in the two countries of Maghreb. Second, the results show that in the long term, there is a strong unidirectional causality from economic growth to international tourism receipts.

Keywords:

• TLGH
• tourism receipts
• economic growth
• cointegration
• Granger causality
• Morocco and Tunisia

JEL Classification:

• C32
• E01
• F43
• L83
• O57

Acknowledgements

The authors thank the two anonymous referees for their comments.

Notes

UNWTO Tourism Highlights, 2011, Edition.

World Travel and Tourism Council (2012a, 20012b).

See Balaguer and Cantavella-Jorda (2002).

There have been very few empirical studies that investigated on questions concerning the tourism industry in these two countries (see for Morocco: Bouzahzah and El Menyari 2012 and for Tunisia: Choyakh 2008; Belloumi 2010; Cortes-Jimenez et al., 2011).

Indeed the sample is not exhaustive but it includes developed as well as developing countries. The country selection is random. We tried to select very different countries in order to obtain a representative sample.

Several authors such as Balaguer and Cantavella-Jorda (2002) and Gundez and Hatemi (2005) suggest the inclusion of real exchange effective rates in order to deal with potential overlooked variable problems and to account for external competitiveness.

See Sims (1980) and Sims, Stock, and Watson (1990).

It should be noted that the number of optimal lag is determined from the Akaike information criterion (AIC) and Hannan–Quinn taking into account the VAR specification. This number is 3 for Morocco and 2 for Tunisia. Thus, the VEC model is estimated for a lag order equal to 2 (p−1 = 2) for Morocco and 1 (p−1 = 1) for Tunisia.

Hachicha (2003) suggests that over the period of 1961–1995 economic growth was driven by manufactured exports rather than food-processing exports and international tourism.

This kind of inverse causality, running from economic growth to exports, has been suggested, for example, by Kaldor (1967), Bhagwati (1988) and Rodrik (1995).