TY - JOUR
T1 - Financial development and tourism
T2 - A century of evidence from Germany
AU - Churchill, Sefa Awaworyi
AU - Cai, Yifei
AU - Erdiaw-Kwasie, Michael Odei
AU - Pan, Lei
N1 - Funding Information:
We thank the anonymous referee for the insightful comments, which helped to improve the quality and readability of the article. All the remaining errors are our own.
Publisher Copyright:
© 2022 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2023
Y1 - 2023
N2 - 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.
AB - 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.
KW - ARDL
KW - financial development
KW - time-varying causality
KW - tourist arrivals
KW - wavelet coherence
UR - http://www.scopus.com/inward/record.url?scp=85132405613&partnerID=8YFLogxK
U2 - 10.1080/00036846.2022.2086964
DO - 10.1080/00036846.2022.2086964
M3 - Article
AN - SCOPUS:85132405613
VL - 55
SP - 305
EP - 318
JO - Applied Economics
JF - Applied Economics
SN - 0003-6846
IS - 3
ER -