Does tourism expansion effectively spur economic growth in Morocco and Tunisia? Evidence from time series and panel data

A considerable amount of literature has been published on the relationship between tourism and economic growth. Nevertheless, there is a lack of empirical works for the Middle East and North Africa countries, especially for Morocco and Tunisia. Therefore, assessing the tourism-growth nexus in Morocco and Tunisia is essential. This study uses the Feder's theoretical growth model to explain the relationship between tourism and economic growth in these two countries. Cointegration and Granger causality tests are the main econometric approaches used in this study. Overall, we find that economic growth, tourism and capital are cointegrated in both countries. Furthermore, the results show that tourism Granger-causes economic growth, thus supporting the tourism-led growth hypothesis in Morocco and Tunisia. Therefore, economic growth of these countries can be sustained through the expansion of their tourism sectors.