Abstract

The empirical debate on the role of international tourism on local economic growth is inconclusive and is characterized by two main opposing views: the Tourism-led economic growth hypothesis and the Economy-driven tourism growth hypothesis. The objective of the study was to establish the role of tourism development on economic growth using time series secondary data from Zimbabwe. Empirically, the study develops a tourism-growth model that is an extension of Solow (1956) neoclassical growth function and attempts to determine whether there is the long-run and short-run relationship via Autoregressive Distributed Lag (ARDL) model and Granger technique. The main finding of this study is the Tourism-led economic growth hypothesis can be accepted in Zimbabwe both in shortrun and long-run periods. The study findings have empirically verified the presence of the Tourism-led economic growth hypothesis in Zimbabwe. Tourism could be an effective substance for the sustainable growth of the country’s economy and a strategy to help Zimbabwe recover from Covid-19 economic effect. They showed that tourism is in part an endogenous growth process, requiring a systematic allocation of resources by government to sustain its effect on local economies. Further, the country can ease visa and border crossing processes as well as eradicate insecurity for sustainable tourism and economic development.

Keywords: Tourism-led growth, Investment, Economic growth, Tourism development, ARDL