Tourism–growth nexus in Pacific Island Countries: A panel study on information and communication technology as a contingent factor

Abstract

Growth in tourism earnings, aside from adding real resources in terms of foreign exchange and rising income in the organized sector of the hospitality industry, has given rise to employment opportunities in the informal sectors of the Pacific Island Countries (PICs). The spread of information and communication technology (ICT), on the other hand, has facilitated faster and smoother international tourism and provides greater opportunities for tourists travelling in interior islands for ecotourism and home stays at affordable costs. In this article, we assess the role of tourism with ICT as a contingent factor on economic growth in a panel study of five selected PICs. The results show that in the long run, tourism and ICT contribute around 0.25 and 0.02%, respectively. The interaction term of tourism with ICT is positive and statistically significant, indicating they act as complements. The complementary relationship begins to work when ICT reaches a certain threshold level.

Keywords

economic growth information and communication technology Pacific Island Countries tourism

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