Salah Abosedra

Small sample evidence on the tourism-led growth hypothesis in Lebanon

This paper investigates the contribution of tourism to economic growth in Lebanon for the time period of 1995–2010. The presence of long-run and causal relationships is investigated applying the bounds testing approach to cointegration and Granger causality tests. Because of the small sample (T = 16), econometric approaches and critical values used for testing receive special attention. Additionally, a number of diagnostic tests are utilised to ensure that the model is suitable and correct. Interestingly, our results reveal that tourism and economic growth are cointegrated. The Granger causality test indicates that the tourism-led growth hypothesis is valid for Lebanon. Therefore, policy initiatives promoting tourism ought to be further developed and implemented to stimulate economic growth and development for the economy of Lebanon.

The Links between Energy Consumption, Financial Development, and Economic Growth in Lebanon: Evidence from Cointegration with Unknown Structural Breaks

We investigate the relation between financial development, energy consumption, and economic growth in the economy of Lebanon over the period 2000M2–2010M12. Our findings confirm the existence of cointegration among the variables. The results indicate that financial development and energy consumption contribute to economic growth in Lebanon. The impact of energy consumption on economic growth is positive showing the significance of energy as a main stimulant of economic growth. Financial development is also found to play a vital role in enhancing economic growth. Financial development and economic growth also result in further increase in energy consumption. We offer some policy implications specific to Lebanon considering the recent discovery of large oil and gas reserves in the country and the historical importance of its banking sector which remains a center of Lebanon’s service-oriented economy.

Does tourism expansion effectively spur economic growth in Morocco and Tunisia? Evidence from time series and panel data

ABSTRACT A considerable amount of literature has been published on the relationship between tourism and economic growth. Nevertheless, there is a lack of empirical works for the Middle East and North Africa countries, especially for Morocco and Tunisia. Therefore, assessing the tourism-growth nexus in Morocco and Tunisia is essential. This study uses the Feders theoretical growth model to explain the relationship between tourism and economic growth in these two countries. Cointegration and Granger causality tests are the main econometric approaches used in this study. Overall, we find that economic growth, tourism and capital are cointegrated in both countries. Furthermore, the results show that tourism Granger-causes economic growth, thus supporting the tourism-led growth hypothesis in Morocco and Tunisia. Therefore, economic growth of these countries can be sustained through the expansion of their tourism sectors.

Assessing the Role of Remittances and Financial Deepening in Growth: The Experience of Lebanon

Abstract We investigate the relationship between remittances, financial deepening and the growth of the Lebanese economy using quarterly data from 1993 to 2011. Our results provide strong support for the theoretical contention that remittances and financial development share a robust long-run relationship with growth in Lebanon. However, the results indicate that short-run effects on growth volatility are statistically insignificant from financial development but strongly significant from remittances. These results extend recent findings on the financial development, remittances and growth nexus and imply that benefits expected from remittances for addressing growth volatility in Lebanon materialize more than those associated with financial development.

Short and Long-run Budgetary Relationships: Evidence from Lebanon

We empirically estimate the short- and the long-run effects of fiscal policy on the Lebanese economy. Such estimates should be valuable in shaping the administrative reforms of the budgetary process in Lebanon where the debt-to-GDP ratio reached about 146% in 2013 (Bank Audi, 2013). A Vector Error Correction model is estimated to determine the long-run relationship between government spending and government revenues and their short-run dynamics. The results indicate that long-run adjustments are better managed through government revenues and expenditures, whereas short-run imbalances should be offset by changes in spending. Two adjustment mechanisms leading to long-run equilibrium are identified and their dynamics are explained. The first is “value-based” which stipulates that government reduces spending and increases revenues when the economy is growing. The second is “cost-based” where reduction in government expenditures is called for when interest rates increase.