Tourism-growth nexus in Pakistan: Evidence from ARDL bounds tests

- This article investigates the impact of tourism on the economic growth of Pakistan.
- Auto Regressive Distributed Lag (ARDL) estimators are used to test the hypothesis.
- Tourism has a significantly positive impact on the economic growth of Pakistan.
- Other determinants of economic growth are international trade, capital and inflation.

This study is an attempt to test the long run relationship between international tourism and economic growth of Pakistan by using Autoregressive Distributed Lag (ARDL) models over the period of 1972 to 2011. The initial results show that the causality runs from tourism to economic growth. Furthermore, the estimated growth regression clearly indicates that the international tourism has a significantly positive impact on the economic growth of Pakistan along with other variables like physical capital and international trade. This implies that the improvement in the tourism sector may enhance the economic growth activities in Pakistan.