Tourism Development and Economic Growth Nexus in Bangladesh: Evidence from ARDL and Content Analysis Approach

Abstract

Research purpose: This main aim to examine the relationship between tourism development and economic growth in Bangladesh and identify the structural factors that limit tourism’s contribution to the national economy.

Type of study/research method/approach: This is a mixed-method study with annual data from 1991 to 2024. A quantitative analysis is performed by implementing the Autoregressive Distributed Lag (ARDL) bounds testing approach to calculate the short-term and long-term relationships among the variables: Nominal GDP, Tourism receipts, Foreign Direct Investment (FDI), Exchange rate, and inflation. The Granger causality test is also applied, and the qualitative content analysis is employed to identify structural and policy problems in the tourism industry.

Findings: These findings indicate that the ARDL bounds test confirms the presence of a long-run relationship between the variables and also that the long-run impact of tourism receipts on economic growth is not significant. This weak long-run impact appears to be associated with sectoral infrastructural and structural limitations like poor marketing capacities, bad governance, poor infrastructure, and missing investment linkages. In the short run, tourism has a positive but delayed effect on GDP. Moreover, the results of the Granger causality indicate that there exists a unidirectional causality from economic growth to tourism.

Originality/value: The uniqueness of the research is providing econometric evidence of ARDL and content analysis to explain the positive and negative impact of tourism on the growth of Bangladesh and why the long-run impact is restricted.

Practical implications: The research also suggests that policymakers should enhance the tourism infrastructure, improve the governance structure, refine marketing approaches, and foster interconnection with investments to increase the contribution of tourism to sustainable economic growth in Bangladesh.

Limitations: The study mainly focuses on national level data and does not include regional or primary survey data from tourism stakeholders.