THE LONG RUN RELATIONSHIP BETWEEN TOURISM AND ECONOMIC GROWTH IN WESTERN BALKAN COUNTRIES: A PANEL CO-INTEGRATION ANALYSIS

Nowadays, tourism is a fast-growing industry, and one of the most vital sectors that drive the economic growth. This paper analyzes and tries to shed light in the contribution that tourism has on economy. The analysis is done for four Western Balkans countries, making a comparison between their tourisms, economies and tourism impact on GDP. The model is done for 14 years, for the period 2000-2014. Independent variables included are the number of foreign arrivals, visitor exports, foreign overnights in hotels and capital investment. While as a dependent variable stands the tourism contribution to GDP. Since the variables are not stationary, has been applied Panel Johansen Co-integration technique. After implementing the model, the results show that some of tourism independent variables such as visitor exports and capital investments influence the economic growth of the four countries, but in total we can say that there is no long run relationship between the tourism and economic growth of these countries.