Bibiana Lanzilotta

Research note:The tourism-led growth hypothesis for Uruguay

This paper analyses the effects of tourism on the long-run economic growth of Uruguay. Using quarterly data from 1987.I to 2006.IV, the study uses cointegration analysis and shows the existence of a cointegrated vector among Uruguayan real per capita GDP, Argentinean tourism expenditure (the principal source of tourism in Uruguay) and real exchange rate between Uruguay and Argentina. It also shows that there is a positive causality relationship between Argentinean tourism expenditure and real per capita GDP of Uruguay. Finally, the authors compare this study with similar papers investigating the tourism-led growth hypothesis.

A nonlinear approach to the tourism-led growth hypothesis: the case of the MERCOSUR

This paper analyses the tourism-led growth hypothesis for the four countries of the MERCOSUR regional trade block. By applying nonlinear techniques, we explore whether tourism activity leads – in the long run – to economic growth, or, alternatively, economic expansion drives tourism growth, or indeed a bidirectional relationship exists between the two variables. To this end, non-parametric cointegration and causality tests are applied to quarterly data for the period 1990–2011. We show the existence of a cointegrated relationship between real per capita gross domestic product and tourism expenditure for all countries. Moreover, the linearity of this relation is rejected for both Argentina and Brazil (economies with a relatively diversified structure). The non-parametric causality tests confirm in all cases the causality from tourism to growth. Meanwhile, only for Uruguay and Argentina causality also goes in the inverse direction (from growth to tourism). Finally, the paper compares the results of the nonlinear approach with those obtained by using the traditional linear methodology.