The purpose of this paper is to investigate the tourism-led growth hypothesis in Laos.Design/methodology/approachThe authors test the tourism-led growth hypothesis using autoregressive distributed lag (ARDL) cointegration estimation (Pesaran et al., 2001) and Granger causality tests.FindingsThe results of this paper show that when tourism is forcing variable, there is no long-run relationship between tourism development and economic growth. The Granger causality test demonstrates that there is a uni-directional causality running from economic growth in tourism.Social implicationsThe empirical results and policy recommendation may be useful for other small developing countries.Originality/valueThis study is the first study to investigate the relationship between tourism development and growth in Laos, using a relatively new econometric approach – ARDL bound testing.
Tourism Review – Emerald Publishing
Published: May 1, 2018
Keywords: Causality; Laos; ARDL cointegration test; Tourism-led growth