RELATIONSHIP BETWEEN TOURISM AND ECONOMIC GROWTH IN TRANSITION COUNTRIES: PANEL DATA ANALYSIS

Abstract

This study examines the causal relationships between tourism revenues and economic growth in 15 transition countries for the period 1995-2018. In the empirical analysis, panel causality analysis, which takes account of dependence and heterogeneity between countries, is used. According to the empirical results, 3 out of 15 transition countries (Bosnia and Herzegovina, Russia and Ukraine) showed a one-way relationship from tourism revenues to economic growth and a two-way relationship in Macedonia, Serbia and Montenegro. For Kazakhstan and Azerbaijan there was a one-way relationship from economic growth to tourism revenues, while for other countries there was no relationship between the two variables. The empirical findings provide important policy outcomes for the 15 transition countries studied.