The Impact of Domestic Tourism Development on Economic Growth—An Empirical Study Based on Cross-Country Data

Abstract

Domestic tourism is the foundation of tourism development in most countries, the main component of the global tourism market, and an important part of the global economy. Based on a systematic review of relevant domestic and international literature, this paper uses balanced panel data from 121 countries during 1996–2015 and applies static and dynamic panel models to empirically study the impact of domestic tourism development on economic growth. The results show that the level of domestic tourism development varies across countries; the Tourism-Led Growth Hypothesis applies to domestic tourism development globally, and according to dynamic model estimates, a 1% increase in domestic tourism development level raises economic growth rate by 0.00254%. Meanwhile, factors such as physical capital, government size, innovation capacity, human capital, industrial structure, passenger transport capacity, and urbanization level also have certain impacts on economic growth and should not be ignored.