Economic Growth, Tourism Receipts and Exchange Rate in MENA zone: Using Panel Causality Technique

In this study, we investigate the long run and causality relationship between tourism receipts and economic growth in 17 MENA selected countries during 1995-2007. We incorporate exchange rate as an intermittent variable in a bivariate setting between tourism receipts and economic growth. Using panel cointegration technique, the results show that in the MENA countries, there are the bidirectional causality between tourism receipts and economic growth in long run and short run. Also we find that the unidirectional causality from exchange rate to economic growth and tourism receipts. Our findings imply that MENA economics could increase their short-run and long run economic growth by strategically strengthening their tourism industries. In final, we provide some policy implication for this industry in these set of countries.