Tourist arrivals, international tourist expenditure, and economic growth in BRIC countries

Abstract

The aim of this paper is to examine the impact of tourism arrivals and tourist expenditure on economic growth in case of four developing countries (Brazil, Russia, India, and China) using annual data from 1995 to 2016. To achieve this objective, we apply Dumitrescu–Hurlin causality test and panel data models. The results indicate that tourist expenditure has a positive impact on economic growth. Further, the results show that tourist arrivals do not have any significant effect on economic growth. The direction of causality shows that tourist expenditure has bidirectional causality with economic growth. The policy suggests that the investment environment must be upgraded through appropriate measures such as deregulation in economic activity; developing the port facilities, road network, railways, and telecommunication facilities; achieving clarity in trade policy and flexibility in labor markets; and setting a suitable regulatory framework and tariff structure and the country must grow in terms of better facilities and infrastructure for tourists. © 2020 John Wiley & Sons, Ltd