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This study examined the relationship between tourism demand and economic growth in India from 1990 to 2019 using VECM and ARDL models to capture long- and short-run dynamics. Structural breaks in 1994 and 2014, detected via Zivot–Andrews and Bai–Perron tests, account for policy shifts, including post-liberalization adjustments and the Make in India initiative. VECM results reveal multiple long-run cointegrating relationships among tourist arrivals (TA), GDP, FDI, and HDI, with rapid convergence to equilibrium. In the short run, FDI and HDI significantly affect tourism demand, while GDP shows a limited immediate impact. ARDL results confirm HDI as the strongest long-term determinant, alongside positive contributions from GDP and FDI. Structural break dummies indicate that policy and institutional reforms temporarily influenced tourism flows. Overall, findings support a development-led tourism perspective, emphasizing human capital, income growth, strategic FDI, and reforms as drivers of sustainable tourism expansion in India.
Jan et al. (Fri,) studied this question.