Tourism And Economic Growth In Kenya: An Empirical Investigation

Abstract

In this study, we examine the dynamic relationship between tourism sector development and economic growth – using annual time-series data from Kenya. The study attempts to answer one critical question - “Is tourism development in Kenya pro-growth?” The study uses an ARDL-bounds testing approach to examine these linkages and also incorporates trade as an intermittent variable between tourism development and economic growth in a multivariate setting. The results of our study show that there is a uni-directional causality from tourism development to economic growth. The results are found to hold irrespective of whether the causality is estimated in the short run and long run. Other results show that international tourism Granger-causes trade, while trade Granger-causes economic growth in Kenya in both the short and the long run.