Growth Of Tourism Industry And Its Factors Affecting In Pakistan

The present study investigates the impact of carbon dioxide emission(C02 emission),economic growth,energy consumption,trade openness and terrorism on tourism receipts in Pakistan over the period of 1980 to 2016,which attracts a wide range of tourists every year.The study employed the cointegration techniques of autoregressive distributed lagged(ARDL)bound test to detect the presence of long-run relationship while the short and long-run estimates of the study were analyzed using the ARDL model.The results validated the presence of tourism development hypothesis in two out of two models.In Model 1 the impact of C02 emission,GDP,energy consumption and trade openness on tourism receipts is examined.By using autoregressive distributed lagged(ARDL)method the study revealed that there is a strong positive long-run relationship between tourism receipts and its determinants.The study further applies a Granger causality test and confirms the unidirectional causality from C02,GDP,energy consumption and trade openness towards tourism receipts.This study also used dynamic ordinary least squared(DOLS)techniques to get the long-run robust estimates.Last but not the least,the current study also used innovative accounting approach i.e.Variance decomposition and Impulse production function,the overall conclusion from results is that bidirectional causality between C02,economic growth,energy consumption,trade openness and tourist's receipts is confirmed as established by the VECM Ganger causality approach.It implies that results are robust.Moreover,the results of impulse response analysis support of granger causality that tourist's receipts and trade openness cause each other.To be brief,overall results indicate that tourist's receipts,CO2 emission,energy consumption and trade openness are interlinked.Furthermore,the present study also found that the reaction of C02 emission,and therefore consumption of energy,to change in tourism demand is a positive and increase strength in the long-run.This suggests that tourism demand in Pakistan has resulted not only increases energy consumption but also an increase in climate change,which is confirmed by the econometric techniques of this current study.For attracting more tourist Pakistani tourism authorizes should adopt some precautions to avoid environmental pollution and apply successful energy conservation policies for tourism development.There are certain strategies for the improvement of energy performance and reduction in energy expenditures which needs to accept in setting environmental targets for developmental projects and energy settings.Therefore,the need for additional energy arises from tourism can be obtained through clean and easily accessible energy sources,such as photovoltaic panels and clean river water which is excessively available in northern parts of Pakistan.The results thus suggest that the government should encourage the investments in the services sector of the industry to improve its performance and to make sure the share of the services sector to GDP is far greater than the manufacturing share of GDP.The results show that innovative investment activities and services should be more invested in order to increase production capacity.Investments in less-polluting industries rather than polluting capital industries and environmentally friendly projects by multinational companies can also help reduce environmental pollution and increase tourism in PakistanSimilarly,In Model 2 investigates the impact of terrorist intensity and GDP on tourism receipts.The study utilized the ARDL approach to explore the short and long-run relationship between the study variables.Results show a significant negative impact of terrorism on tourism in the long-run as well as in short-run.The results concluded that during the study period there occur a decrease in growth of the overall tourists,receipts because of the increase in terrorist activities The study,thus,concluded that because of terrorism activities international tourists visit alternative places rather than the terrorism-hit Pakistani tourism spots,thus,there occurs a decrease in the tourists,receipts.The study suggests that the government should emphasize boosting the tourism receipts by investing in counter-terrorism activities and promoting the tourism industry by ensuring foolproof security to increase the tournst's confidence to visit tourism points in Pakistan.Results of Granger causality supports the long-run impact of terrorism on tourists receipts as an increase in terrorism can cause a decrease in tourist receipts.On the other hand,Granger causality results conclude that economic growth could be a cause for boosting the tourism industry,which in turn can attract more international tourists.The Pakistan government must take quick actions to control terrorism since it is destructive to the tourism industry as well as in light of its negative effect on the economic development of a country Moreover,the government should expand the business and employment opportunities not just in light of the fact that unemployment is harmful to economic growth yet additionally to spare the economy from terrorism as unemployed people can easily become the puppets of terrorist groups by paying them and to feed their families.Hence,the country should focus on increasing the confidence of private investors and international tourists to boost the tourist's receipts.