Main Article Content
Abstract
This study investigates the association between economic growth and tourism in Sri Lanka using cointegration analysis for the period 1980 to 2019. The analysis was performed using the Augmented Dickey-Fuller test, Phillips-Perron test, Engle-Granger cointegration, and Granger causality tests. The results revealed a long-run equilibrium relationship among variables while there is a disequilibrium in the short run. The estimated error correction term is theoretically acceptable and approximately 5 per cent yearly correction of its disequilibrium in the short run was found. Granger causality test presented a long-run unidirectional causality which is running from tourism to economic growth and thus findings confirm the tourism-led growth hypothesis in Sri Lanka tourism and development spectrum. Therefore, tourism has a significant positive impact on economic activities in the long run. Findings further emphasize that benefits of the economic development must be transferred to the further development of tourism to maintain a bilateral causality which is an important concept in this regard. It provides the rationale for the further development of productive policy strategies to attract more tourists to the country and upsurge visitor expenditures during their stay in Sri Lanka since Sri Lanka has significantly developed its accommodation capacities. Findings further reveal that the tourism sector must be developed parallel to the economic development to boost the growth through tourism. Therefore, all sectors, the government, private bodies, and voluntary organizations must become active partners in this endeavour, and policy implications need the focus of every aspect of enhancing tourism as a growth engine.
Article Details
Copyright (c) 2021 Kurukulasooriya Nisantha, Lelwala Erandathie

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Management & Economics Research Journal is licensed under a (CC BY-NC 4.0).
The following guidelines apply to all users:
- 1-Individuals may view, download, print, or save Journal content for the purposes of research and teaching.
- 2-Any use and/or copies of this Journal in whole or in part must include the customary bibliographic citation, including author attribution, date, article title, the Journal name, and its website address.
Authors who publish with this journal agree to the following terms:
a) Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a (CC BY-NC 4.0) that allows others to share and adapt the work with an acknowledgement of the work's authorship and initial publication in this journal.
b) Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal’s published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
c) Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work. Where authors include such work in an institutional repository or on their website, we request that they include a statement that acknowledges the Management & Economics Research journal including the name of the journal, the volume and issue, and a web link to the journal item.