Tourism and Economic Growth: An Empirical Analysis of Greece
Purpose: The purpose of the study is to examine the impact of tourism on economic growth in Greece. This examination aims to test the validity of the tourism-led growth hypothesis. Design/Methodology/Approach: The study utilizes time series regression analysis. Gross Domestic Product (GDP) is used as the dependent variable, while the real exchange rate (EX), Foreign Direct Investment (FDI), and Tourism Receipts (TR) are used as independent variables. The time series data cover the period from 1995 to 2018 for Greece. Findings: The findings indicate a positive relationship between tourism and economic growth. Specifically, a 1% increase in the real exchange rate corresponds to a 0.78% rise in GDP. Regarding FDI, a 1% increase leads to a 0.003% decrease in GDP. Concerning Tourism Receipts, a 1% increase leads to a 0.036% increase in GDP. These results confirm that tourism significantly contributes to Greece's economic growth, thereby validating the tourism-led growth hypothesis. Practical Implications: The study suggests that policymakers should emphasize policies that encourage investment in the tourism sector, as this would benefit Greece's economic growth. Originality/Value: The study contributes to existing literature by examining the impact of tourism on economic growth specifically for Greece during the period from 1995 to 2018. It provides insights that can guide policymakers in supporting the tourism sector as a driver of economic growth.