This study attempts to investigate the relationship between international tourism, trade, and economic growth in India over the period from April 1991 to July 2012. To account for potential asymmetries in the relationship, we make use of new asymmetric Granger-causality tests and frequency analysis. We show that there is bidirectional Granger-causality between trade and tourism in positive components, whereas unidirectional Granger-causality runs from tourism to trade for negative components. Moreover, we find evidence of bidirectional Granger-causality between economic growth and tourism in positive components, but unidirectional Granger-causality running from economic growth to tourism for negative components. On the other hand, the results from frequency analysis provide evidence of Granger-causality between trade and tourism, and also between economic growth and tourism, at different frequency bands.
Hosoya Y (1991) The decomposition and measurement of the interdependency between second-order stationary processes. Probab Theory Relat Fields 88(4):429–444. doi:10.1007/bf01192551CrossRefGoogle Scholar
Kulendran N, Wilson K (2000) Is there a relationship between international trade and international travel? Appl Econ 32:1001–1009CrossRefGoogle Scholar
Kweka J, Morrissey O, Blake A (2003) The economic potential of tourism in Tanzania. J Int Dev 15:335–351CrossRefGoogle Scholar
Lean HH, Tang CF (2010) Is the tourism-led growth hypothesis stable for Malaysia? A note. Int J Tour Res 12:375–378CrossRefGoogle Scholar
Lemmens A, Croux C, Dekimpe MG (2008) Measuring and testing granger causality over the spectrum: an application to European production expectation surveys. Int J Forecast 24:414–431CrossRefGoogle Scholar
Narayan PK (2004) Economic impact of tourism on Fiji’s economy: empirical evidence from the computable general equilibrium model. Tour Econ 10:419–433CrossRefGoogle Scholar
Shan J, Ken Wilson (2001) Causality between trade and tourism: empirical evidence from China. Appl Econ Lett 8(4):279–283CrossRefGoogle Scholar