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The Dynamic Role of Financial Development in Analyzing the N-Shaped Tourism-Led Growth Hypothesis in Mauritius

This study is a critical step to explore how financial development moderates the N-shaped tourism-led growth hypothesis in Mauritius, considering the rising influence of the tourism sector on this small island but a high-income country and the dearth of recent empirical studies in this direction. Re...

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Autores principales: Opuala-Charles, Silva, Omoke, Philip Chimobi, Uche, Emmanuel
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer US 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9568983/
http://dx.doi.org/10.1007/s13132-022-01048-0
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author Opuala-Charles, Silva
Omoke, Philip Chimobi
Uche, Emmanuel
author_facet Opuala-Charles, Silva
Omoke, Philip Chimobi
Uche, Emmanuel
author_sort Opuala-Charles, Silva
collection PubMed
description This study is a critical step to explore how financial development moderates the N-shaped tourism-led growth hypothesis in Mauritius, considering the rising influence of the tourism sector on this small island but a high-income country and the dearth of recent empirical studies in this direction. Relying on annual time series between 1980 and 2018, the study employed the ARDL model and the quantile ARDL model, a technique rarely applied in extant studies to analyze the possible nonlinear (N-shaped) dynamics of tourism and the moderating role of financial development on productivity in Mauritius. The various cointegration tests proved that the series have a common long-run trend, whereas the causality test validates the tourism-led growth hypothesis. The ARDL estimates reveal positive and significant impacts from tourism and financial development on economic growth, against the negative and insignificant effects of the other control variables in the long and short run. However, from the QARDL, the impacts of tourism and financial development on growth remained predominantly negative in the long term at all quantiles of economic growth except at q0.30, where a positive impact was recorded from tourism. However, in the short run, the contributions of tourism and financial development remained positive but insignificant across the distributions of economic growth, therefore buttressing the time-varying (N-shaped) nature of the relationship. By implication, policies that could shield the economy from shocks arising from business cycles and sustain the positive/significant contributions of tourism and financial system to economic growth are pertinent to boost the confidence of all stakeholders.
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spelling pubmed-95689832022-10-16 The Dynamic Role of Financial Development in Analyzing the N-Shaped Tourism-Led Growth Hypothesis in Mauritius Opuala-Charles, Silva Omoke, Philip Chimobi Uche, Emmanuel J Knowl Econ Article This study is a critical step to explore how financial development moderates the N-shaped tourism-led growth hypothesis in Mauritius, considering the rising influence of the tourism sector on this small island but a high-income country and the dearth of recent empirical studies in this direction. Relying on annual time series between 1980 and 2018, the study employed the ARDL model and the quantile ARDL model, a technique rarely applied in extant studies to analyze the possible nonlinear (N-shaped) dynamics of tourism and the moderating role of financial development on productivity in Mauritius. The various cointegration tests proved that the series have a common long-run trend, whereas the causality test validates the tourism-led growth hypothesis. The ARDL estimates reveal positive and significant impacts from tourism and financial development on economic growth, against the negative and insignificant effects of the other control variables in the long and short run. However, from the QARDL, the impacts of tourism and financial development on growth remained predominantly negative in the long term at all quantiles of economic growth except at q0.30, where a positive impact was recorded from tourism. However, in the short run, the contributions of tourism and financial development remained positive but insignificant across the distributions of economic growth, therefore buttressing the time-varying (N-shaped) nature of the relationship. By implication, policies that could shield the economy from shocks arising from business cycles and sustain the positive/significant contributions of tourism and financial system to economic growth are pertinent to boost the confidence of all stakeholders. Springer US 2022-10-14 /pmc/articles/PMC9568983/ http://dx.doi.org/10.1007/s13132-022-01048-0 Text en © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2022, Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law. This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Article
Opuala-Charles, Silva
Omoke, Philip Chimobi
Uche, Emmanuel
The Dynamic Role of Financial Development in Analyzing the N-Shaped Tourism-Led Growth Hypothesis in Mauritius
title The Dynamic Role of Financial Development in Analyzing the N-Shaped Tourism-Led Growth Hypothesis in Mauritius
title_full The Dynamic Role of Financial Development in Analyzing the N-Shaped Tourism-Led Growth Hypothesis in Mauritius
title_fullStr The Dynamic Role of Financial Development in Analyzing the N-Shaped Tourism-Led Growth Hypothesis in Mauritius
title_full_unstemmed The Dynamic Role of Financial Development in Analyzing the N-Shaped Tourism-Led Growth Hypothesis in Mauritius
title_short The Dynamic Role of Financial Development in Analyzing the N-Shaped Tourism-Led Growth Hypothesis in Mauritius
title_sort dynamic role of financial development in analyzing the n-shaped tourism-led growth hypothesis in mauritius
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9568983/
http://dx.doi.org/10.1007/s13132-022-01048-0
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