Economic growth and tourism receipts : evidence from Europe

According to TLG hypothesis, international tourism would contribute, as any other export, to income growth by enhancing efficiency through competition and by facilitating the exploitation of economies of scale in local firms. This paper utilizes the systems generalized method of moments (GMM) and panel Granger causality Granger Causality tests in panel data models, to investigate the tourism receipts and gross domestic product (GDP) relationship for 30 European countries over the period 1995–2015. This study aims to test whether tourism receipts growth model predictions are valid for 30 European countries’ economies. Values for the GDP per capita variable that is considered to represent economic growth and tourism receipts per capita variable that is considered to represent tourism concentration activities have been obtained from the World Bank Database.