Foreign Direct Investment and Tourism Development in Africa

Ogechi Adeola; Nathaniel Boso; Ellis L. C. Osabutey; Evans Olaniyi

doi:10.3727/108354220X15957702910144

Foreign Direct Investment and Tourism Development in Africa

Ogechi Adeola, Nathaniel Boso, Ellis L. C. Osabutey, Evans Olaniyi

Centre for Sustainability and Responsible Management

Research output: Contribution to journal › Article › peer-review

Abstract

This study examines the nexus between foreign direct investment (FDI) inflow and tourism development. Using annual data for 44 countries in Africa from 1995 to 2014, and three different specifications of panel autoregressive distributed lag model, the study investigates short-run and long-run dynamics between FDI and tourism development. The study finds a significant positive relationship and a bidirectional long-run causality between FDI inflows and tourism development. In addition, the results show a negative short-run relationship between exchange rate and tourism development. Furthermore, there is evidence that economic growth and political stability are important determinants of tourism development on the African continent. A major policy implication is that creating a politically stable environment and sustaining a growing economy will help attract FDI inflows to boost tourism development.

Original language	English
Pages (from-to)	395-408
Journal	Tourism Analysis
Early online date	31 Jul 2020
DOIs	https://doi.org/10.3727/108354220X15957702910144
Publication status	E-pub ahead of print - 31 Jul 2020

Access to Document

10.3727/108354220X15957702910144

Cite this

@article{f4f3abb4ec2148078993b3d97a23d234,

title = "Foreign Direct Investment and Tourism Development in Africa",

abstract = "This study examines the nexus between foreign direct investment (FDI) inflow and tourism development. Using annual data for 44 countries in Africa from 1995 to 2014, and three different specifications of panel autoregressive distributed lag model, the study investigates short-run and long-run dynamics between FDI and tourism development. The study finds a significant positive relationship and a bidirectional long-run causality between FDI inflows and tourism development. In addition, the results show a negative short-run relationship between exchange rate and tourism development. Furthermore, there is evidence that economic growth and political stability are important determinants of tourism development on the African continent. A major policy implication is that creating a politically stable environment and sustaining a growing economy will help attract FDI inflows to boost tourism development.",

author = "Ogechi Adeola and Nathaniel Boso and Osabutey, {Ellis L. C.} and Evans Olaniyi",

year = "2020",

month = jul,

day = "31",

doi = "10.3727/108354220X15957702910144",

language = "English",

pages = "395--408",

journal = "Tourism Analysis",

issn = "1943-3999",

publisher = "Cognizant Communication Corporation",

}

TY - JOUR

T1 - Foreign Direct Investment and Tourism Development in Africa

AU - Adeola, Ogechi

AU - Boso, Nathaniel

AU - Osabutey, Ellis L. C.

AU - Olaniyi, Evans

PY - 2020/7/31

Y1 - 2020/7/31

N2 - This study examines the nexus between foreign direct investment (FDI) inflow and tourism development. Using annual data for 44 countries in Africa from 1995 to 2014, and three different specifications of panel autoregressive distributed lag model, the study investigates short-run and long-run dynamics between FDI and tourism development. The study finds a significant positive relationship and a bidirectional long-run causality between FDI inflows and tourism development. In addition, the results show a negative short-run relationship between exchange rate and tourism development. Furthermore, there is evidence that economic growth and political stability are important determinants of tourism development on the African continent. A major policy implication is that creating a politically stable environment and sustaining a growing economy will help attract FDI inflows to boost tourism development.

AB - This study examines the nexus between foreign direct investment (FDI) inflow and tourism development. Using annual data for 44 countries in Africa from 1995 to 2014, and three different specifications of panel autoregressive distributed lag model, the study investigates short-run and long-run dynamics between FDI and tourism development. The study finds a significant positive relationship and a bidirectional long-run causality between FDI inflows and tourism development. In addition, the results show a negative short-run relationship between exchange rate and tourism development. Furthermore, there is evidence that economic growth and political stability are important determinants of tourism development on the African continent. A major policy implication is that creating a politically stable environment and sustaining a growing economy will help attract FDI inflows to boost tourism development.

U2 - 10.3727/108354220X15957702910144

DO - 10.3727/108354220X15957702910144

M3 - Article

SN - 1943-3999

SP - 395

EP - 408

JO - Tourism Analysis

JF - Tourism Analysis

ER -