Tourism Development and Economic Growth in Bangladesh: New Evidence from Nonlinear Autoregressive Distributed Lag
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AbstractWe examine the long-run relationship between tourism development and economic growth using the Nonlinear Autoregressive Distributed Lag (NARDL) model for Bangladesh using annual data from 1980-2016. We find an asymmetric relationship between tourism and Bangladesh's economy since a one percent increase in tourism receipt increases economic growth by about 0.19 percent. On the contrary, due to a one percent decline in the tourism receipt, economic growth will decrease by about 0.66 percent. So, the decline in tourism receipt will have a higher negative impact on economic growth than the increase in the tourism receipt in Bangladesh, which result is important for current pandemic situation in tourism due to Covid-19. We also reveal that the impact of positive change in the tourism revenue on GDP stabilizes around 8 years; however, an adverse change on GDP does not stabilize in 15 years. We recommend that a systematic allocation of resources is required to promote and stimulate the tourism industry in Bangladesh for a favourable impact on the country's long-run economic development.Keywords: Tourism Development; Economic Growth; NARDL; Bangladesh; AsymmetryJEL Classifications: C32, O50, Z32DOI: https://doi.org/10.32479/ijefi.11040
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Khan, A. M., Amin, S. B., Ahmed, A., & Sultana, T. (2021). Tourism Development and Economic Growth in Bangladesh: New Evidence from Nonlinear Autoregressive Distributed Lag. International Journal of Economics and Financial Issues, 11(2), 100–107. Retrieved from https://econjournals.com/index.php/ijefi/article/view/11040