Financial development and tourism: A century of evidence from Germany

Sefa Awaworyi Churchill, Yifei Cai, Michael Odei Erdiaw-Kwasie, Lei Pan

    Research output: Contribution to journalArticlepeer-review


    This article presents findings from the first study to examine the direct effects of financial development on tourism. Using a unique historical dataset for Germany covering 1870 to 2016, we apply an autoregressive distributional lag (ARDL) model with structural breaks. To identify the lead–lag relationship between financial development and tourism, we adopt the wavelet coherence method and the most recently developed Shi, Hurn, and Phillips (2020) time-varying causality test. The ARDL results suggest that, on average, financial development is associated with an increase in tourist arrivals. The wavelet coherence results unveil a significant positive correlation between financial development and tourism in both short- and medium-terms, and financial development leads to tourism growth in Germany. Moreover, the causality results indicate that the positive effect of financial development on tourism is most evident from 2009 onward. Our study provides important implications for policymakers.

    Original languageEnglish
    Pages (from-to)305-318
    Number of pages14
    JournalApplied Economics
    Issue number3
    Early online date20 Jun 2022
    Publication statusPublished - 2023


    Dive into the research topics of 'Financial development and tourism: A century of evidence from Germany'. Together they form a unique fingerprint.

    Cite this