FDI and Tourism as a Means to Growth: Reality or Wishful Thinking?

It is believed that Foreign Direct Investment (FDI) and Tourism industry lead overall development in many countries. However, mixed empirical results have been obtained in a long-standing debate. The first chapter of this thesis studies the tourism-economic growth nexus in emerging economies and the second and third chapters investigate the direct and indirect effects of FDI on the economic growth of seven European countries with significant GDP shares of international tourism receipts and FDI in their economies. By employing non-linear ARDL analysis and impulse response functions as a complement to the Block Exogeneity Wald test, this study provides statistical evidence that suggests that increasing the rate of economic growth by increasing the current share of international tourism and FDI in some economies is highly unlikely if the quality of investment and the rate of return they generate continue to be as low as they have been in the past. Keywords: International Tourism; Tourism Receipts; Foreign Direct Investment; Economic Growth, European Countries.