Abstract

Efforts have been made by scholars to analyze the ability of tourism to promote sustainable development. This study therefore adds its voice to the already existing studies by evaluating the relationship between economic growth (GDP) and tourism receipts in North African countries between the years 1995-2016. For robustness, the study includes merchandise exports, inflation and dummy variable which captures the Arab spring of 2011. The study adopts the Pooled Mean Group (PMG) estimate to analyze this relationship. It shows that tourism has the capacity to drive economic growth both in the short run with a coefficient of (6%) and in the long run with a coefficient of (29%), hence, the study joins the tourism led growth school of thought.

Keywords: Merchandize export, Inflation, Gross Domestic Product (GDP), Dummy variable, Panel data, Pooled Mean Group (PMG)