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Submitted
April 1, 2017
Accepted
March 6, 2018
Published
March 8, 2018
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Abstract

This study analyzes the relationship between the number of tourists, tourism investment, government tourism spending, and economic growth in South Sumatra. It uses Granger causality model and simultaneous equation model to estimate the empirical model. The findings show that the number of tourists, the added value of the tourism sector, and the tourism spending of the tourism sector affect economic growth, while tourism investment does not affect the economic growth. In the second model, this study found that economic growth, tourism added value, tourism, and government tourism spending affect the number of tourists. This study implies that government policy has an important role in encouraging the tourism sector development which is indicated the contribution this sector on economic growth.

Keywords

tourists investment of tourism government spending of tourism and economic growth

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Author Biographies

Suhel Suhel, Department of Development Economics, Universitas Sriwijaya

Department of Economic & Development

Abdul Bashir, Department of Development Economics, Universitas Sriwijaya

Department of Economic & Development
How to Cite
Suhel, S., & Bashir, A. (2018). The role of tourism toward economic growth in the local economy. Economic Journal of Emerging Markets, 10(1), 32–39. https://doi.org/10.20885/ejem.vol10.iss1.art4
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