Long-run relationship between ICT and tourism demand in Sri Lank

Abstract

ICT is one of the factors encouraging countries’ tourism demand. The objective of this study is to test the long-run relationship between ICT and tourism demand in Sri Lanka over the period of 1990 -2018. In this study, exploratory data analysis technique, unit root test, bivariate cointegration technique employed as analytical tools. The test result of exploratory data analysis shows that there is a positive relationship between ICT and tourism demand in Sri Lanka. The unit root test results put forward that the variables used in this study are stationary at their 1st difference. Further, the bivariate cointegration test result points out that ICT in Sri Lanka has a long-run relationship with tourism demand. The estimated coefficients of ICT in the short and long-run highlights a beneficial relationship with tourism demand in Sri Lanka. The estimated coefficient of error correction term informs that 0.9% of error will be adjusted every year. The estimated value of Durbin-Watson test statistic indicates that the estimated model is robust. Further, the test result of Granger causality test confirms oneway Granger causal relationship from ICT to tourism demand.