The Relationship between the Quality of Tourism Services and Economic Growth: An Endogenous Growth Model

Document Type : Original Article

Authors

1 Assistant Professor, Department of Economics, University of Bojnord

2 Assistant Professor of Economics, Faculty of Humanities, University of Bojnord

3 PhD Candidate in Economics, Faculty of Economics and Political Sciences, University of Shahid Beheshti

Abstract

The international tourism industry has a high potential for creating foreign exchange earnings and employment growth. Hence, attention to this industry can play an important role in the economic development of Iran. The study tries to propose a theoretical and empirical model that highlights the role of tourism services quality and endogenous tourism in economic growth. Hence a theoretical growth model of international trade has been employed where tourism is the main reason for growth and quality of tourism services has a positive impact on long-term growth. The study also provides the empirical analysis to test the relation between tourism quality and economic growth in Iran during 1969-2015. The results show that the tourist arrivals and quality of tourism accommodations have a positive effect on domestic GDP, but foreign GDP has a negative effect on it. The findings support a two-way causal relationship between real GDP growth and tourism growth in Iran.

Keywords

References

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