The relationship between economic growth and indirect tourism employment: a study based on Sri Lanka

Abstract

The tourism sector is a very important sector in the Sri Lankan economy. The main objective of this study is to find out the relationship between economic growth and total indirect tourism employment. To achieve the objective, long-run relationships between variables were estimated through the ARDL test, and to estimate a short-run relationship between variables the error correction model has been used. Gross domestic product and total indirect employment of tourism are used as a variable in this study. The periods 1977 and 2019 annual data were analyzed with E-views-10 statistical package. ARDL bound test has proved that co-integration occurred between variables in this study. Further, according to the analytical results, a long-run positive correlation was obtained between economic growth and total indirect employment in the tourism sector in Sri Lanka. In the short run, there were no relationships between economic growth and total indirect employment in the tourism sector. So, the Sri Lankan government should develop dynamic policies to promote the tourism sector in the long-run period.