THE CONTRIBUTION OF TOURISM DEVELOPMENT IN MEDITERRANEAN COUNTRIES. A DYNAMIC PANEL DATA APPROACH

Abstract

Like the most developing countries, the Mediterranean countries have also given priority to the development of tourism industry as a part of their economic growth strategy. This study intends to investigate the relationship between tourism development and economic growth in eight Mediterranean countries. In order to investigate empirically the long-run relationship between economic growth and tourism development we use a multivariate model with GDP per capita, real receipts per capita, inflation in average consumer prices and real effective exchange rate using the new heterogeneous panel cointegration technique. In pursuit of this objective, the tests of panel cointegration, the Hausman Test and Fully Modified Ordinary Least Squares (FMOLS) are conducted by using panel data. The data used in this study are annual covering the period 1980 - 2014.

JEL Classification: C33, Z32, E31