Tourism Development and Economic Growth in Bangladesh: New Evidence from Nonlinear Autoregressive Distributed Lag


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Authors

  • Abdul Mahidud Khan Bangladesh University of Professionals (BUP)
  • Sakib Bin Amin North South University, Bangladesh.
  • Adib Ahmed Bangladesh University of Professionals (BUP)
  • Tanzila Sultana Bangladesh Institute of Governance and Management

Abstract

We examine the long-run relationship between tourism development and economic growth using the Nonlinear Autoregressive Distributed Lag (NARDL) model for Bangladesh using annual data from 1980-2016. We find an asymmetric relationship between tourism and Bangladesh's economy since a one percent increase in tourism receipt increases economic growth by about 0.19 percent. On the contrary, due to a one percent decline in the tourism receipt, economic growth will decrease by about 0.66 percent. So, the decline in tourism receipt will have a higher negative impact on economic growth than the increase in the tourism receipt in Bangladesh, which result is important for current pandemic situation in tourism due to Covid-19. We also reveal that the impact of positive change in the tourism revenue on GDP stabilizes around 8 years; however, an adverse change on GDP does not stabilize in 15 years. We recommend that a systematic allocation of resources is required to promote and stimulate the tourism industry in Bangladesh for a favourable impact on the country's long-run economic development.Keywords: Tourism Development; Economic Growth; NARDL; Bangladesh; AsymmetryJEL Classifications: C32, O50, Z32DOI: https://doi.org/10.32479/ijefi.11040

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Author Biographies

Abdul Mahidud Khan, Bangladesh University of Professionals (BUP)

Currently working as a lecturer in the Department of Economics, Bangladesh University of Professionals (BUP).

Sakib Bin Amin, North South University, Bangladesh.

Currently working as an associate professor in the Department of Economics, North South University, Bangladesh.

Adib Ahmed, Bangladesh University of Professionals (BUP)

Currently working as a lecturer in the Department of Economics, Bangladesh University of Professionals (BUP).

Tanzila Sultana, Bangladesh Institute of Governance and Management

Currently working as a research associate in Bangladesh Institute of Governance and Management.

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Published

2021-03-30

How to Cite

Khan, A. M., Amin, S. B., Ahmed, A., & Sultana, T. (2021). Tourism Development and Economic Growth in Bangladesh: New Evidence from Nonlinear Autoregressive Distributed Lag. International Journal of Economics and Financial Issues, 11(2), 100–107. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/11040

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