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Effects of tourism and institutional quality on infrastructural development in Africa: new evidence from the system GMM technique
Abstract
This study investigated how infrastructural development is responding to international tourism and institutional quality in Africa using the system GMM technique and a panel of 31 African economies from 2011 to 2020. Existing studies have generally ignored these relationships. We find that international tourism is an essential driver of infrastructural development in Africa. We also find that the quality of governance institutions significantly promotes infrastructural development in Africa when measured using government effectiveness, rule of law, and regulatory quality, but remain muted when measured using control of corruption, voice and accountability, and political stability. We highlighted the implications of these findings in terms of diversifying the economies of Africa through investments in tourism and reforming the governance institutions in the region to combat corruption, entrench transparent and accountable governance, and promote political stability. Interestingly, our findings further indicate that human capital development, GDP per capita, and remittances are important drivers of infrastructural development in Africa, while the role of foreign direct investment remained significantly negative. We provided policy recommendations based on these findings.
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This study investigates the nexus between financial development, agricultural output, and institutional quality in Nigeria using annual time series data from 1990 to 2022. The Autoregressive Distributed Lag (ARDL) model and Toda-Yamamoto's (1995) non-causality approach are employed to assess the moderating influence of institutional quality on the relationship between financial development and agricultural output. The long-run findings reveal that financial development, institutional quality, and lending interest rates exert a positive and significant impact on agricultural output, while human development has a negative and significant impact. Conversely, the short-run results indicate that financial development and human development positively and significantly influence agricultural output, whereas lending interest rates negatively and significantly impact agricultural output. Based on these findings, the study recommends that policymakers enact measures to promote financial development, enhance institutional quality, and reduce interest rates to stimulate agricultural growth. Additionally, strengthening institutional quality is crucial to ensure that the benefits of financial development reach smallholder farmers, who play a pivotal role in Nigeria's agricultural sector. This study contributes to the literature by examining the moderating role of institutional quality in the relationship between financial development and agricultural output in Nigeria.
Following the need for more recent rigorous empirical evidence on the role of institutions at sectoral level as well as the conflicting empirical evidences on the institutions-growth relationship in Africa, this study investigated the sectoral impacts of institutional quality in Sub-Saharan Africa (SSA). The study also revisited the role of institutions in the aggregate economy. The system GMM estimation procedure and a panel of 42 SSA countries were used over the period 2010 to 2018. The results indicate that contrary to the widely held view that institutions foster growth and development, the role of institutional quality in sectoral and aggregate economic performance in SSA generally remained muted. However, the results indicate that initial level of real GDP and labor are robust drivers of growth, particularly in the aggregate economy. The study therefore concludes that the sub-region requires institutional reform, enhanced human capital development and capital accumulation to drive sectoral and aggregate economic performance in SSA.
JEL Classification: N20; F43; C23; N17
Purpose
The main purpose of this study is to examine the impact of different dimensions of institutional quality indices on the economic growth of Sub-Saharan African (SSA) countries.
Design/methodology/approach
The study uses a panel data set of 31 SSA countries from 1991 to 2015 and employs a two-step system-GMM (Generalized Method of Moments) estimation technique.
Findings
The study's empirical results indicate that investment-promoting and democratic and regulatory institutions have a significant positive effect on economic growth; however, once these institutions are taken into account, conflict-preventing institutions do not have a significant impact on growth.
Practical implications
The study's findings suggest that countries in the region should continue their institutional reforms to enhance the region's economic growth. Specifically, institutions promoting investment, democracy and regulatory quality are crucial.
Originality/value
Unlike previous studies that either use composite measures of institutions or a single intuitional indicator in isolation, the present study has employed principal component analysis (PCA) to extract fewer institutional indicators from multivariate institutional indices. Thus, this paper provides important insights into the distinct role of different clusters of institutions in economic growth.
This paper investigates the nexus between infrastructure development and economic complexity (EC) for 27 African countries over 2003-2016 period. Employing Ordinary Least Squares, Generalised Method of Moments and quantile regressions, findings show that infrastructure development fosters EC. This effect is heterogeneous across the EC distribution.
Institutional quality (IQ) plays a crucial role in achieving the Sustainable Development Goals. IQ is fundamental
to SDG’s 16, which promotes peaceful and inclusive societies, provides access to justice, and builds effective,
accountable, and transparent institutions. Countries with strong institutions that uphold the rule of law, protect
human rights, and combat corruption are more likely to achieve this goal and promote economic development.
Therefore, this study examines the relationship between IQ and economic development, as measured by the
human development index (HDI), in 70 developing countries between 2002 and 2018. To achieve the above
mention objective, various econometric techniques were employed, including CIPS unit root, Westerlund (2007)
co-integration, and Cross-sectional Augmented Autoregressive Distributed Lag, and robustness analysis conducted using Fully Modified Ordinary Least Square, Dynamic Ordinary Least Square, Augmented Mean Grouped,
Impulse Response Function, and Variance Decomposition Analysis panel estimators. The study found that IQ and
globalization have a positive, while inflation, unemployment, and corruption have a negative impact on HDI. The
estimates from the Impulse Response Function show that IQ positively influences HDI from 2019 to 2028.
Additionally, the Variance Decomposition Analysis reported that around 38% of the variations in HDI can be
attributed to changes in IQ. To improve IQ, transparency must be prioritized as it is the foundation of IQ
enhancement. Similarly, measures must be taken to combat corruption, and strong administrative intervention is
required to advance economic development. These findings suggest that policymakers must prioritize improving
institutional quality and fighting corruption to promote economic development in developing countries.
A growing body of literature highlights the importance of export sophistication for economic development. Given the newness of the literature on export sophistication, its determinants are under‐exploited. As a pioneer study, this paper attempts to fill this gap in the literature by examining the effect of infrastructure development on export sophistication. Based on a panel of 45 African countries over the period 2003–2016, the results of the different estimations show that infrastructure, including transport, electricity, ICT and access to water and sanitation, improves export sophistication in Africa. Our results also show that the effect of infrastructure varies at different intervals of the export sophistication distribution. Therefore, improved infrastructure would allow African countries to not only improve their export structure but also achieve sustainable and durable growth.
Based on the fact that Africa has not fared well in attracting foreign direct investments
in the last decade compared to other regions of the world, especially during
periods of high uncertainty occasioned by one crisis or the other, this study investigated:
the impacts of global uncertainty and economic governance institutions on
FDI inflow to Africa; the moderating effect of economic governance institutions on
global uncertainty-FDI relationship in Africa; and other significant drivers of FDI
inflow to Africa. The study used the system GMM modeling framework and a panel
of 46 African economies over the period 2010–2019. The results indicate that global
uncertainty has a significant dampening effect on FDI inflow to Africa, and economic
governance institutions on the continent amplify this effect rather than mitigate
it. The results further indicate that natural resource endowment, market size,
and initial FDI inflows are robust drivers of FDI inflows to Africa, while the roles of
financial development and trade openness remained muted. Overall, the study concludes
that policymakers in Africa should take urgent steps to strengthen the quality
of economic governance institutions as a means of mitigating the excruciating effect
of global uncertainty on FDI inflows to Africa.
Africa has received considerable amounts of external aid over the last two decades without significant improvements in socio-economic conditions on the continent. This study, therefore, examines the effects of foreign aid on growth in Africa, and how institutional quality can moderate these effects. The study used the system generalized method of moments estimation technique and a panel of forty-two African countries over the period 2010–2018. Interestingly, the study established that even though foreign aid impacts negatively on growth in Africa, improving the quality of institutions on the continent can reverse this negative effect. In fact, the study computed a threshold value of institutional quality beyond which foreign aid would be a blessing to Africa. This implies that for foreign aid to contribute meaningfully to growth in Africa, the quality of institutions should improve beyond this threshold. Unfortunately, the average level of institutional quality in Africa is presently below this threshold. The study concluded that policymakers in Africa should take urgent steps to strengthen the quality of institutions on the continent as a means of exploiting the continent’s huge foreign aid to drive growth and reduce
the excruciating effects of poverty plaguing more than half of its population.
This study examined the effects of both aggregate and disaggregated infrastructural development indices (such as transport, electricity, ICT, and water and sanitation infrastructure indices) on economic performance in Africa. The study used the dynamic system GMM framework and found that both aggregate and disaggregated infrastructural development indices impact positively on GDP per capita growth in Africa. These impacts were shown to be significant in all cases, except for the transportation infrastructure index. The results overwhelmingly confirmed the prevalence of the symmetric hypothesis in the infrastructure–growth relationship in Africa. The study also found some evidence in support of the significant roles of capital, labour and initial GDP per capita in Africa’s economic performance, while the role of trade remained negative and muted. The study concluded that through effective public administration, African leaders and policymakers can promote economic performance on the continent by evolving policies that favour increased infrastructural development, human capital development and capital accumulation.
Institutional quality largely influences the ways in which economic agents align their production and operational behaviors towards expanding the share of renewable energy in the total energy mix and enhancing environmental performance. This study therefore explores the panel data for the EU-28 countries to assess the dynamic effects of institutional quality, tourism development, financial development, and renewable energy on environmental performance over the period 2002 to 2014. Using a two-step dynamic system generalized method of moments (GMM), the empirical results broadly suggest that institutional quality can be explored to dampen the potential negative effects of tourism and economic growth on environmental performance. In addition, financial development and renewable energy are positively related to environmental performance. This suggests that financial stability and energy consumption transition to renewable energy are necessary requirements to improve environmental performance. The policy implication for this study is that strengthening of institutional quality, financial stability, and adjusting to alternative and clean energy systems are the surest ways to achieve a cleaner and sustainable environment in the EU region.
Residents' communities feature to make innovative tourism development strategies. Residents play an indispensable role in developing policies and sustainable tourism infrastructure projects. A few research studies have sought to understand the animated influence of sustainable tourism opportunities on residents' life. The study examines how tourism opportunities enhance residents' quality of life in the context of the New Silk Road Initiative. The main objective of the current research study is to analyze the interplay of perceived impacts of New Silk Road tourism infrastructure development on local com-munities' perception of sustainable tourism development and perceived quality of life. Previous researches were focusing on sustainable tourism projects incorporated various approaches to describe the linkage between the chosen variables. This study built and tested a causal model that specified the direct and indirect interconnections of perceived tourism infrastructure, sustainable tourism development, and residents' perception of the quality of life. This study incorporated a self-administered questionnaire to collect data sets from Kazakhstan's residents. The findings indicated that both direct and indirect effects of the New Silk Road Initiative of tourism infrastructure exhibited significant and positive influence on residents' quality of life through residents' perceived sustainable tourism development. The results indicated that the New Silk Road Initiative for tourism infrastructure positively effects developing sustainable tourism opportunities, which, in turn, escalates residents' life quality. Besides, findings are useful in designing the promotions of sustainable tourism governance and residents' welfare under New Silk Road Infrastructural Projects. However, solely tourism infrastructure strategies cannot improve residents' quality of life. Economic, social, cultural, and environmental factors are vital to developing sustainable tourism at the destinations and need concentration to stimulate and ensure the positive impact of tourism infrastructure on specific beneficial outcomes. The findings' implications are useful in developing more infrastructure projects in Kazakhstan.
The question of whether institutional quality is an important driver of growth has been the subject of a growing literature in both developed and developing economies across the globe. This study revisits this relationship in Nigeria from 1981Q1 to 2016Q4 and discusses the relevant policy implications for post Covid-19 Nigeria. The study adopted the ARDL approach which uses a bounds test approach based on unrestricted error correction model (UECM) to test for a long run relationship among the relevant variables. The findings indicate that institutional quality impacts negatively but insignificantly on growth in Nigeria, both at the aggregate and sectoral levels. However, initial output growth levels, capital and labour were found to be important drivers of growth in the country, while trade is growth-retarding. The study concludes that in this post Covid-19 era in Nigeria, there is need to improve the quality of socioeconomic and political institutions in the country so that a more robust impact of these institutions can be felt in the economic performance of the country both at the aggregate and sectoral levels.
This paper examines the governance-"education quality" nexus in a panel of 49 sub-Saharan African countries over the period 2000-2012. Ordinary Least Squares (OLS) and Quantile regression (QR) are employed as estimation strategies. The following findings are established. First, from the OLS, governance variables are negatively correlated with poor education quality. Second, with regards to QR, about half of the governance dynamics are not significantly correlated with poor education quality in the lowest quantile of poor education quality. With the exception of corruption-control, the other governance dynamics are negatively correlated with poor education quality in a non-monotonic pattern.
This study estimates the threshold level of institutional quality that will ensure the efficient use of infrastructure in stimulating growth in Sub-Saharan Africa based on panel data from 41 countries in the region between 1996 and 2015. It employs a dynamic panel threshold regression model which is derived from the New Institutional Economics theory and this is estimated using the first-differenced Generalized Method of Moments estimator. Results reveal that the relationship between infrastructure and growth is non-linear which provides support for the use of a threshold regression model, with institutional quality serving as the threshold variable. In terms of the threshold level, the findings show that the index of institutional quality that will ensure the efficient use of infrastructure in stimulating growth is 0.410. The study also finds that, on average, countries in the region operate below this threshold level, hence their poor growth. The conclusion that is drawn from the analysis is that poor or low institutional quality is one of the factors hampering the growth of countries in the SSA region. A major limitation of the study is that the estimator employed for the threshold analysis is developed for models with single threshold value only and so does not allow for multiple threshold values. Thus, it is recommended that governments in the region need to formulate and implement policies targeted at improving the level of institutional quality in their countries.
Residents' communities feature to make innovative tourism development strategies. Residents play an indispensable role in developing policies and sustainable tourism infrastructure projects. A few research studies have sought to understand the animated influence of sustainable tourism opportunities on residents' life. The study examines how tourism opportunities enhance residents' quality of life in the context of the New Silk Road Initiative. The main objective of the current research study is to analyze the interplay of perceived impacts of New Silk Road tourism infrastructure development on local com-munities' perception of sustainable tourism development and perceived quality of life. Previous researches were focusing on sustainable tourism projects incorporated various approaches to describe the linkage between the chosen variables. This study built and tested a causal model that specified the direct and indirect interconnections of perceived tourism infrastructure, sustainable tourism development, and residents' perception of the quality of life. This study incorporated a self-administered questionnaire to collect data sets from Kazakhstan's residents. The findings indicated that both direct and indirect effects of the New Silk Road Initiative of tourism infrastructure exhibited significant and positive influence on residents' quality of life through residents' perceived sustainable tourism development. The results indicated that the New Silk Road Initiative for tourism infrastructure positively effects developing sustainable tourism opportunities, which, in turn, escalates residents' life quality. Besides, findings are useful in designing the promotions of sustainable tourism governance and residents' welfare under New Silk Road Infrastructural Projects. However, solely tourism infrastructure strategies cannot improve residents' quality of life. Economic, social, cultural, and environmental factors are vital to developing sustainable tourism at the destinations and need concentration to stimulate and ensure the positive impact of tourism infrastructure on specific beneficial outcomes. The findings' implications are useful in developing more infrastructure projects in Kazakhstan.
The article examines the effects of renewable energy, trade, carbon dioxide emissions and international tourism on economic growth in EU-28, considering panel data for the period 1995–2014. The investigation finds the new determinants of economic growth. The empirical results find support from the panel fully modified least squares (FMOLS), panel dynamic least squares (DOLS) and fixed effects (FE) as estimation techniques. The econometric results are consistent with the existing literature. The variables considered in this study are cointegrated in the first difference, as suggested by the panel unit root test. The present study seeks to advance the knowledge of the growth determinants, paying attention to the effect that both the tourism and energy sector exerts on economic growth for EU-28 countries. The empirical results demonstrate that trade openness, tourism arrivals and renewable energy encourage economic growth. Therefore, according to the econometric results, renewable energy allows improving environmental quality. However, CO2 emissions are positively correlated with economic growth, showing that growth is directly correlated by climate change and greenhouse gas. The results also confirm the tourism-led growth hypothesis (TLGH) for the panel. Finally, the empirical results confirm that trade openness, energy use and international tourism contribute to enhance economic growth. Based on these findings, further insights and policy prescription are offered in the concluding section.
Graphical abstract
This study investigates the direction of causality between tourism and inclusive growth in Nigeria using quarterly data between 1995Q1 and 2018Q4. The study uses four indicators of tourism; tourist arrivals, tourism receipts and expenditures, and a tourism activity index, generated with the Principal Component Analysis, from the first three indicators. The study employs the Toda-Yamamoto granger causality test. The results validate the tourism-led inclusive growth hypothesis using tourist arrivals and tourism activity index, while the neutrality hypothesis of no causality is accepted for inclusive growth and each of tourism receipts and expenditures. The findings have implications for policymakers in Nigeria. These include promoting tourism, by means of appropriate measures, in the economy in order to create jobs and reduce income inequality and poverty; putting in place measures to reduce corruption to avoid mismanagement of tourist receipts; and making sure that there is a necessary due process towards tourism expenditures.
We examine the empirical relationship between FDI and tourism in Bangladesh by employing the annual time series data from 1972 to 2017. Standard econometric techniques, like Augmented-Dickey Fuller (ADF), Phillips-Perron (PP) and Zivot-Andrews structural break augmented unit root tests, Johansen cointegration test, Granger causality test, Vector Error Correction Model (VECM), Dynamic Ordinary Least Square (DOLS) and Autoregressive Distributed Lag (ARDL) estimation methods and Cumulative Sum (CUSUM) stability test have been applied in this paper. Variables are found to be stationary at first difference form. Furthermore, cointegration results show concerned variables are associated in the long run. We find both short run and long run causality running from FDI to tourism in the case of Bangladesh but not vice versa. From the long run estimation results of DOLS and ARDL, we find that a 1 million USD increase in FDI will increase tourism receipts by 0.065 and 0.062 million USD respectively. Our results are expected to provide guidelines to the policymakers to formulate the sustainable tourism policies in Bangladesh.
This paper proposes simple tests of error cross-sectional dependence which are applicable to a variety of panel data models, including stationary and unit root dynamic heterogeneous panels with short T and large N. The proposed tests are based on the average of pair-wise correlation coefficients of the OLS residuals from the individual regressions in the panel and can be used to test for cross-sectional dependence of any fixed order p, as well as the case where no a priori ordering of the cross-sectional units is assumed, referred to as \(\hbox {CD}(p)\) and \(\hbox {CD}\) tests, respectively. Asymptotic distribution of these tests is derived and their power function analyzed under different alternatives. It is shown that these tests are correctly centred for fixed N and T and are robust to single or multiple breaks in the slope coefficients and/or error variances. The small sample properties of the tests are investigated and compared to the Lagrange multiplier test of Breusch and Pagan using Monte Carlo experiments. It is shown that the tests have the correct size in very small samples and satisfactory power, and, as predicted by the theory, they are quite robust to the presence of unit roots and structural breaks. The use of the \(\hbox {CD}\) test is illustrated by applying it to study the degree of dependence in per capita output innovations across countries within a given region and across countries in different regions. The results show significant evidence of cross-dependence in output innovations across many countries and regions in the World.
This paper examines the joint impact of infrastructure capital and institutional quality on economic growth using a large panel dataset covering 99 countries and spanning the years 1980–2015. The empirical strategy involves estimating a simple growth model where, in addition to standard controls, infrastructure, institutional quality, and their interaction are included as explanatory variables. Potential endogeneity concerns are addressed by employing generalized method of moments estimators that utilize internal instruments. We find that the interaction terms between infrastructure capital and institutional quality show a positive and significant impact on economic growth. These results are robust to a variety of alternative specifications and institutional quality measures. Hence, our results suggest that maximizing returns from infrastructure capital requires improving the quality of institutions.
From an idealistic viewpoint, the existence of the tourism industry in a country/region is a blessing because of its anticipated sustainable economic benefits. To turn this idealistic state into a realistic one, institutions need to play a pivotal role in optimizing the desired incentives. The present study examines the asymmetric role of institutional quality in stimulating tourism inflows (receipts and arrivals) in selected Asia Pacific countries involved in tourism. The previous literature has established that improving institutional quality attracts tourism inflows to a destination. However, the literature fails to identify the specific point (threshold level) above (below) which the relationship turns positive (negative). To the best of our knowledge, this is the first study that estimates the asymmetries in the nexus of institutions and tourism inflows, using robust nonlinear autoregressive distributed lag approach. Our results show that the tourism inflow in Asian Pacific countries responds asymmetrically to any changes in institutional quality, and there is a single threshold of 7.52 points, where the impact of institutional quality reverses. We conclude that our findings are robust to the alternative measures of tourism inflows. The study offers useful policy inputs for devising short and long-run policies for the betterment of the institutional framework in the region by understanding the asymmetric impact of institutional quality on tourism inflow.
The importance of the tourism sector as an economic activity has increased the interest of researchers trying to understand the impact of tourism on economic growth. Therefore, the purpose of the present quantitative research is to analyze the relationship between tourism and economic growth in the case of Sao Tome and Principe employing the Tourism-led growth hypothesis (TLGH) over the period of 1997-2018, using time-series data of the following variables: Gross Domestic Product (GDP), Tourism receipts (TR), Real Exchange Rate (EX), and Foreign Direct Investment (FDI). To achieve the proposed objective, first, the unit root test was applied; the result indicated that all the 4 variables are stationary at first difference I(1), futher the Johansen for cointegration was tested and found cointegration of two-equation. The Granger causality approach was employed to enlighten the direction of causality between the variables. A unidirectional relationship was found between TR and GDP, also between FDI and all the other variables (GDP, TR, ER).Keywords: Tourism, economic growth, unit root, cointegration, causalityJEL Classifications: C22, L83, O55DOI: https://doi.org/10.32479/ijefi.9105
Citizens’ low continuous-use intention has become a great challenge for the development of e-government in China. This study has developed a chain model of e-government service quality, perceived value, and citizens’ continuous-use intention to explain the relationship between government website service quality and perceived value, as well as how that relationship influences citizens’ reuse intention. Using data collected from a survey of 1,650 citizen users living in one direct-controlled municipality and four high-population cities in China, this study verifies the components of e-government service quality through partial least squares (PLS) analysis and then tests the proposed concept model using structural equation modeling. The results reveal that the concept of e-government service quality has eight contributing dimensions: system quality, reliability, security, accessibility, information quality, service capability, interactivity, and responsiveness. Perceived service value is a powerful mediator between service quality and citizens’ continuous-use intention. The intention to use is a consequence of service quality, service value, and satisfaction.
Oil spillage in Niger Delta region of Nigeria has been on an increase and almost on a regular basis. The objective of this study is on the causes and terrain of oil spillage in the Niger Delta with emphasis on which causes have significant effect on the volume of oil spillage, the terrain that is most affected. The two way analysis of variance statistical tool was employed and it was discovered that the “sabotage” cause was significant at a 5% level of significance and from the pairwise multiple comparison the “sabotage” cause was seen as the major causes of oil spillage in the Niger Delta followed by the “operational” and “mystery spill” causes respectively. It was also discovered that the incident site that was most affected was the swamp terrain with 82% while water was 46% and land with 6.5%. The study concluded that to reduce or manage oil spillage in Nigeria, the Federal government and Federal environmental management agency should enforce the laws governing oil spill incident in Nigeria.
Rural tourism has been seen during the last decades as a means for economic development of sensitive localities, especially in rural areas. However, little research has been conducted on the sustainability of the development induced by tourism activities in rural areas, and even so, with contradictory results. Our paper investigated how tourism impacted on the sustainable development of rural localities, focusing on three composite indexes: demographic stability, public utilities, and socio-economic sustainability. Mann–Whitney U test was used to determine the differences on each of the above-mentioned indexes between the rural localities with tourist arrivals and those without. The results showed that there is a significant positive effect of tourism on rural areas translated into higher values of all the indexes analyzed. This study brings valuable contributions to both academics and policy-makers: on one hand, it provides new insights into the impact of tourism activities; on the other hand, it offers valuable information to decisional actors regarding development strategies.
Full text at : https://www.mdpi.com/2071-1050/10/10/3529/htm
This study investigates whether mobile phone penetration modulates the effect of different indicators of governance on some indicators of the ease of doing business in Sub-Saharan Africa with data from the period 2000–2012 by employing the Generalised Method of Moments. Three broad concepts of governance are explored: (i) political (comprising voice & accountability and political stability/no violence), (ii) economic (involving government effectiveness and regulation quality) and (iii) institutional (including corruption-control and rule of law). Ten dimensions of entrepreneurship are considered. Two main findings are established with respect to the net effects of the interaction between mobile phones and governance dynamics. They are (1) reduced cost of business start-up procedure, the time to build a warehouse and the time to resolve an insolvency and (2) increased time to enforce a contract, to register a property and to prepare and pay taxes. Implications for theory and policy are discussed. Some of the engaged policy implications include the following. (i) Measures on how to leverage on the potential of mobile phone penetration for entrepreneurship opportunities by addressing challenge of access to and affordability of mobile phones on the one hand and on the other hand, improving on the role of the mobile phone as a participative interface between emerging entrepreneurs and governance. (ii) The relevance of the mobile phone in mitigating information asymmetry between entrepreneurs and government institutions, notably by: reducing government inefficiency (which potentially represents an additional cost to doing business) and decreasing informational rents, bureaucracy and transaction costs.
The success on the development of tourism in a tourist destination depends on the role/participation of tourism stakeholders in the area. Similarly, in the development of rural tourism in the Pakraman Jasri Village. Since the beginning or the planning of tourism development in this village until the time of its development, the tourism stakeholders, namely the local community, government, and investors in this village have been actively and directly involved in supporting the development of Jasri Tourism Village. This writing aims at knowing and understanding the role of tourism stakeholders in Jasri Tourism Village which considered have played the important role in developing tourism in the village. This research was conducted by using the qualitative method in accordance with the rules of scientific research and the paradigm of Cultural Studies. The result of the study showed that the role of tourism stakeholders can be seen in the early planning of Jasri Tourism Village and in the development of Jasri Tourism Village. The tourism stakeholders at Jasri Village have done some efforts to make sure that the development of Jasri Tourism Village will be a success and able to give a significant impact, particularly in improving the welfare of the local society of the Pakraman Village of Jasri in the future time.
Most countries be they developed or developing, rich or poor, and large or small compete for a larger share of the international tourism dollars. They capitalize on their cultural heritage, historic landmarks, rich wildlife, ancient monuments, scenic beauty, and other distinctive attractions and invest in world class resorts, hotels, and entertainment facilities to increase their appeal to the greatest numbers and different types of international travelers. However, success in international tourism is not without a cost. Aside from the investment needed for developing, upgrading, and maintaining the tourism infrastructure, there are environmental and social costs that need to be measured and carefully managed. Although many economists point to the revenues that are earned by destination countries from international tourism, some observers in developing countries show concern about the creation of a state of economic, political and cultural dependency that may have long-term negative consequences.
This article explores the history, present importance, trends, and growth patterns of international tourism. It addresses a number of questions: 1) Has international tourism been a curse or a blessing for countries that have become economically dependent on it?, 2) Have recent trends been more or less favorable to the poorest countries?, 3) What are the forces that bring about shifts and changes in international tourism?, and 4) What are the future prospects for this industry?
Cointegration analysis in modelling tourism demand has rarely been used in previous empirical research studies. This paper attempts to answer two main questions: first, whether certain economic factors are interconnected in the long term with tourism demand, and second, whether a short-run dynamic specification of this demand exists which is statistically adequate and which has appropriate forecasting properties.
This paper examines the long-run relationship between financial globalization and economic growth in sub-Saharan Africa using panel unit root tests, panel cointegration tests and panel multivariate ECM. The study finds that the variables are stationary at first difference — I(1). Also, the results reveal that all the variables are cointegrated, that is, they are related in the long run. The results of the ECT test within the framework of panel multivariate ECM confirm the cointegration tests. The paper concludes that there is a long-run relationship between financial globalization and economic growth in sub-Saharan Africa. The paper argues that sub-Saharan African economies will benefit from the era of financial globalization in the long run in as much as the governments promote and encourage sound macroeconomic policies and strong institutions.
This study examined the effects of public infrastructural development and industrialization on economic complexity in Africa, and how industrialization is moderating the effect of public infrastructural development on economic complexity. The study adopted the pooled ordinary least squares, the dynamic system generalized method of moments and the dynamic bias‐corrected least squares dummy variable estimators with a panel of 34 African economies over the period 2010–2021. The findings revealed that public infrastructural development and industrialization contribute positively and significantly toward enhancing economic complexity in Africa. We also found that industrialization substantially moderates and enhances the influence of public infrastructural development on economic complexity. Furthermore, the results show that trade openness, foreign direct investment inflow, international tourism arrival and institutional quality are potent factors enhancing Africa's economic complexity, while the role of human capital remains muted. These findings suggest that African leaders and policy‐makers can foster economic complexity across the continent by embracing policies that prioritize increased infrastructural development, industrialization, trade openness and foreign direct investment inflow while improving the quality of institutions within the region.
Following the paucity of empirical evidence on the effects of terrorism and uncertainty on economic complexity in Africa and the moderating role of governance institutions on these relationships, this study raised two important questions. First, how are terrorism and uncertainty impacting on economic complexity in Africa? Second, how are governance institutions moderating the effects of terrorism and uncertainty on economic complexity in Africa? To answer these questions, the study employed pooled ordinary least squares and dynamic system generalized method of moments (GMM) estimators, with a panel of 33 African countries over the period 2010–2021. We find that the unconditional effects of terrorism and uncertainty on economic complexity in Africa are predominantly negative and significant. We also find that governance institutions predominantly have unconditional positive and significant impact on economic complexity in Africa but failed to moderate the adverse effect of uncertainty on economic complexity. However, trade openness, international tourism and lagged economic complexity are potent factors promoting economic complexity in Africa, while physical capital stock remained a deterring factor. The study concluded that policymakers and leaders in Africa should engage in collaborative efforts at the African Union level to promote high‐quality institutions, while simultaneously addressing the detrimental effects of terrorism and uncertainty on the continent.
It is believed that Foreign direct investment (FDI) leads a country's overall development, including tourism development in many countries, but mixed empirical results have been obtained in a long-standing debate. This paper investigates the direct and indirect effects of FDI on the economic growth of seven European Union (EU) countries with remarkable shares of tourism receipts and FDI in their economies. The high level of GDP shares of tourism receipts and FDI in these countries indicates that policy makers consider tourism receipts and FDI as critical factors in accelerating the economic growth. By employing impulse responses function as a complement of Block Exogeneity Wald test, this study proves that it might be wishful thinking. FDI has a negative impact on the economic growth of five of these countries and surprisingly stimulates tourism industry in none of the countries of our sample.
Sub-Saharan Africa's electrification rate of 45% in 2018 remains extremely low compared with other developing regions. This study investigates if foreign capital could significantly contribute to enhancing the electricity access rate in Africa, a subject so far neglected in the literature. Specifically, it seeks to know whether increasing FDI, remittances and foreign aid matter for access to electricity in Africa. We utilize a dynamic panel System-Generalized Method of Moments (Sys-GMM) estimator to analyse data collected on a panel of 36 African countries over 2000–2017. The empirical findings show that FDI and remittances are positively and significantly related to increasing access to electricity. Moreover, our results show that foreign aid reduces the electricity access. We finally find that remittances reduce urban-rural disparities in access to electricity, while FDI and foreign aid increase disparities. These results remain consistent when we perform sub-regional analyses, suggesting that African countries should rely more on remittances and FDI to promote universal access to electricity.
Unlike the extant literature, this study revisited the tourism-growth relationship in Africa and accounted for the moderating effects of climatic factors, infrastructural development and political risk on this relationship. The study used the system GMM technique, the panel Granger causality framework, and annual panel data of 41 African countries from 2009 to 2018. Contrary to the tourism-led growth hypothesis, we find that the role of tourism as a driver of economic growth in Africa is predominantly negligible, which in turn suggests that Africa is yet to exploit its tourism potentials to drive growth during the post-Global Financial Crisis period. The study concludes that there is need for African leaders to coordinate policy efforts towards harnessing the tourism potentials on the continent in order to diversify their economies, counter instability in global commodity markets, drive sustainable growth, and fight the twin evils of poverty and unemployment.
Purpose
The purpose of this paper is to empirically examine the impact of institutional quality on the international tourism demand of India. To carry out the analysis, the study first analyses the impact of composite institutional quality index and then proceeds to examine the impact of each of the individual components of institutional quality on the international tourism demand of India. The impact of income of the tourist originating countries, tourism price, trade openness and Human Development Index (HDI) on tourism demand has also been examined.
Design/methodology/approach
The study employed panel autoregressive distributed lag (ARDL) model, with data from top 30 tourist originating countries for India for the period of 1995–2016.
Findings
The results indicated that an increase in the income of the tourist originating countries has spillover effects on the development of tourism sector of India. The impact of cost of travel proxied by relative prices between the destination and origin country is found to be negative, however, statistically insignificant. The impact of trade openness and development level of the host country (proxied by HDI) is found to have positive association with the tourism demand. Institutional quality is found to have positive association with international tourism demand of India. Among the individual components of institutional quality, rule of law, regulatory quality, control of corruption and voice and accountability are found to promote the tourism sector development in the economy. Contrarily, the impact of government effectiveness is found to be negative. In the short run, most of the variables were found to support their counterpart results in long run.
Practical implications
This study has practical implication not only in formulating tourism sector policies of the host countries but also for issuing tourist advisories in tourist originating countries. The study holds that policymakers should work for improving institutional environment of the country such as bureaucracy, legislature, regulatory quality, rule of law and for reducing corruption at all levels so as to ensure a sustained rise in tourist inflows to India.
Originality/value
This study validates the link between institutional quality of a country and international demand for its tourism. To the best of the authors' knowledge, the study is the first attempt that has comprehensively analysed the impact of institutional quality on tourism demand in Indian context which has been generally ignored in the tourism literature.
Although the importance of tourism in the economic development of ethnic minority areas has been emphasized in previous research, little is known about its exact economic effects on these areas. Using panel data of 75 Chinese ethnic autonomous counties from 2007 to 2016, this paper empirically examines and quantifies the impact of tourism development on economic growth based on a threshold model. The empirical results indicate that tourism has a significant nonlinear effect on the economic growth in Chinese ethnic minority areas. Furthermore, tourism's contribution to economic growth tends to decrease along with increasing tourism specialization. In addition, the practical implications of this work are provided.
This article examines the impacts of Infrastructural integration of Regional transport (IIRT) on tourism and the idea of using IIRT to promote tourism. The process of striving for IIRT requires a number of factors to be operationalized, among which the most common are: multimodal terminals (MMT), shared stops (SST), highway construction and improvement (HCI), and railway construction and improvement (RCI). The aim of this article is to evaluate the impacts of IIRT factors on the factors which lead towards the promotion of tourism. The results showed that Guilan province, despite of profiting with all four major transportation modes, has a lack of infrastructural integration among all transportation modes. Furthermore, it was concluded that IIRT can have a significant effect on the promotion of tourism and it can be used as an approach to promote the tourism industry of Guilan province with using several strategies in this regard.
This study investigates the role of institutional quality on environmental performance–tourism development nexus in EU-28 Countries using a dynamic panel data analysis from 2002–2014. The results suggest that institutional quality increases environmental performance but tourism development and output growth reduce environmental performance. While output growth and institutional quality stimulate tourism
development, environmental performance index impedes tourism development. Furthermore, tourism development and institutional quality stimulate output growth but environmental performance condenses output growth. The implication for these findings is that policymakers need to pay more attention to institutional quality improvement to mitigate environmental damage caused by tourism development.
This study examines the relationship between information and communication technology (ICT), infrastructure, and tourism development in Africa between 1996 and 2016 using a dynamic panel gravity model. Our findings show that ICT and infrastructure have a positive, statistically significant relationship with tourism development; as ICT and infrastructure increase, the level of tourist arrivals also increases. This study also identifies relevant factors including bilateral real exchange rate and gross domestic product per capita of the origin countries, suggesting a major role for the variables measured in the region of origin and for those that serve as a comparison between origin and destination. The effect of distance is statistically significant and negative: countries farthest from the origin countries generate less tourism demand, given the higher transportation costs. Repeat tourism (or habit persistence) and natural resources show a significant and positive effect on tourism development. Overall, the empirical results provide evidence that ICT and infrastructural development have opened huge opportunities for growing and strengthening tourism in Africa.
This paper uses relatively new heterogeneous panel autoregressive distributed lag cointegration methods to re-examine the long-run equilibrium and Granger causality relationship between tourism and economic growth for the small island developing states. In addition, the study incorporates energy consumption and foreign direct investment as alternative growth determinants, between the periods 1995 – 2014. After allowing for the heterogeneous country effect, a positive and statistically significant long-run equilibrium relationship between tourism, energy consumption, foreign direct investment and gross domestic product, with a moderate convergence rate towards the long-run path is confirmed. The panel Granger causality test as proposed by Dumitrescu and Hurlin (2012) shows bidirectional causality running from tourism to economic growth, from tourism to energy consumption and from energy consumption to economic growth, while unidirectional causality between foreign direct investment and tourism, between economic growth and foreign direct investment, and between foreign direct investment and energy consumption. Our empirical findings provide support for tourism-induced growth, tourism-induced energy consumption, tourism-induced investment and energy consumption-economic growth relationship in the case of small island developing states. Our empirical results resonate with the existing findings with major policy implications for the small island developing states.
This review examines two new socio-ecological imperatives that have the potential to reshape planning practice and policy: urban climate governance and governance for resilience. The roots of the new imperatives lie in international city collaborative networks funded by philanthropy organisations that operate at city scale. City networks operating at the metropolitan scale raise issues for Australian cities with distributed governance. This practice review considers the early manifestation of both imperatives in what might be termed ‘policy experiments’ in Australia’s two largest cities: the new climate governance framework emerging through the City of Sydney’s collaboration with the C40 network and the resilience regime being shaped by the City of Melbourne’s partnership with Rockefeller Foundation’s Resilient 100 program. Whilst our early analysis has accentuated the positive to some degree, pointing to different, if preliminary, forms of success in both Sydney and Melbourne, the limits and frustrations that present in both contexts cannot be discounted. Urban planners in many world cities and regions will need to consider and possibly absorb these new agendas of urban climate governance and governing for resilience driven by international city collaborative networks.
This article examines the relationship between the level of tourism specialization (TS) and economic growth using a panel dataset covering 31 provinces in mainland China from 1995 to 2013. A quadratic function was introduced following the basic economic law of returns to overcome the weaknesses of constant returns to scale associated with the tourism-led economic growth hypothesis (TLGH). Using tourist arrivals as a percentage of host population (TA) and tourism receipts as a share of real GDP (TR) as the indicators of TS which represent respectively the level/size and the quality/structure dimension of TS, the system generalized method of moments (SYSGMM) regression results suggest that a meaningful inverted-U- or an N-shaped relationship exists between tourism specialization and economic growth. Based on the portfolio of TA and TR in destinations, the effects and characters of tourism on economic growth are discussed regarding the future direction of regional development.
Examines the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance and how those institutions change and how a model of dynamic institutions explains the differential performance of economies through time. Institutions are separate from organizations, which are assemblages of people directed to strategically operating within institutional constraints. Institutions affect the economy by influencing, together with technology, transaction and production costs. They do this by reducing uncertainty in human interaction, albeit not always efficiently. Entrepreneurs accomplish incremental changes in institutions by perceiving opportunities to do better through altering the institutional framework of political and economic organizations. Importantly, the ability to perceive these opportunities depends on both the completeness of information and the mental constructs used to process that information. Thus, institutions and entrepreneurs stand in a symbiotic relationship where each gives feedback to the other. Neoclassical economics suggests that inefficient institutions ought to be rapidly replaced. This symbiotic relationship helps explain why this theoretical consequence is often not observed: while this relationship allows growth, it also allows inefficient institutions to persist. The author identifies changes in relative prices and prevailing ideas as the source of institutional alterations. Transaction costs, however, may keep relative price changes from being fully exploited. Transaction costs are influenced by institutions and institutional development is accordingly path-dependent. (CAR)