Revisiting the Tourism-Led Growth Hypothesis for Barbados : A Disaggregated Market Approach

In testing the tourism-led growth hypothesis, researchers tend to use an aggregate measure of tourism - usually total tourism earnings or tourist arrivals. In contrast, this study adopts a disaggregated market approach to testing this hypothesis. The main advantage of the disaggregated approach is that it provides information on effects of specific tourism markets on growth. Results indicate that causality from tourism to growth is found for each source market over the full sample period (1975Q1 to 2010Q2). However, rolling causality tests indicate that the causal relationships are not stable