The relationship between international trade and economic growth is applied

今天51due教员组给大家带来一篇优秀的essay论文  主要讲述的是在今天的国际贸易与经济增长之间的关系在过去的几年里在文献中得到了广泛的应用，但对于旅游业、经济增长、贸易和旅游业来说，缺非常的少见。本研究采用协整分析和Granger因果关系检验来检验塞浦路斯旅游业、贸易和增长之间的长期关系，以及它们之间的因果关系方向。结果表明，旅游业与经济增长和贸易没有完全结合，而后两者是协整的，旅游者的到达与增长、出口与增长之间以及塞浦路斯进出口之间存在双向因果关系。最后，研究结果表明塞浦路斯旅游者对出口增长的单向因果关系。有论文需要帮忙的亲亲可以联系我们的专属客服喔~

ABSTRACT 摘要

Although the relationship between international trade and economic growth has found a wide application area in the literature over the years, this can not be said about tourism and growth or trade and tourism. This study employs co-integration and Granger causality tests to examine long-run relationship between tourism, trade and growth, and the direction of causality among themselves for Cyprus. Results reveal that tourism is not co-integrated either with growth or trade whereas latter two are co-integrated and there is bidirectional causation between tourist arrivals and growth, between exports and growth and finally between exports and imports in Cyprus. Finally, results suggest unidirectional causation from tourist arrivals to export growth in Cyprus.

I. INTRODUCTION 简介

International tourism and international trade are two major sources of foreign exchange for small countries as well as larger ones. Small countries, in particular small islands, have more dependency on tourism and trade than the larger ones since their economies are based on only a few sectors. For example, according to Kuznets (1966), as the country gets smaller, its dependency on international trade would increase. On the other hand, although many economists agree that small countries have similar advantages and disadvantages when compared to larger ones, there are differences in the origin of these disadvantages. Among common disadvantages are international tourism/trade dependency, vulnerability, high population growth rate, limited labor force, low labor efficiency, diseconomies of scale, low GDP (Gross Domestic Product), high dependency on imports of intermediate and consumption goods, and production of only a few basic goods/services.

The small size of a country, in terms of area and population, may be economically advantageous. The smallness of a state in terms of area and population may in fact be a source of comparative advantage rather than being a constraint on economic growth and development. Specifically, smallness may be more than compensated by certain unique characteristics possessed by small states. Export-oriented services tend to represent such uniqueness and, therefore, a basis for a potential comparative advantage (Mehmet and Tahiroglu 2002)

In the last few decades, some small states have been important service centers in banking, financial and trade services. Among them are Singapore, Hong Kong, Bahrain, Bermuda, Malta, Jersey and Cyprus. The tourism sector has been a locomotive industry for some small economies and the sole source providing a comparative advantage. Bermuda is a good example in the sense that it has emerged as a tourism center, successfully exploiting the ability to take advantage of a favorable climate and location. The strategic location of small states also serves as an important factor for providing banking and financial services. In the Mediterranean Sea, two examples of this category are the south of Cyprus and Malta. Bermuda, Bahrain and Jersey are among other states as studied by Bowe et al. (1998). On the other hand, in the north side of Cyprus, higher education emerged as number one sector contributing to national income of the country. Having restrictions on international trade and tourism industry with other countries, Turkish Cypriots living in the north of Cyprus succeeded in establishing and developing higher education institutions that attracts many foreign students from different regions of the world. Currently, there are six universities in North Cyprus where they attract students and academicians from more than 69 countries

 International tourism not only contributes to economic welfare of countries but also to their socio-cultural, environmental and ecological activities (Lindberg and Johnson, 1997; Bull, 1991; Ryan, 1991; Pearce, 1989). Luzzi and Flückiger (2003) defines international tourism not as an industry but as a single, complex and differentiated product. It is complex because it includes a wide variety of goods and services, and differentiated because each destination has unique features. On the other hand, the purpose of tourism can be in different forms: Leisure tourism, business, visiting friends and relatives, education, conferences, or sports. Thus, international tourism is a major contribution to the welfare of countries in every field. As a result of these activities, tourists are likely to consume and purchase of goods/services that bring economic impact to every sector of countries such as transportation, accommodation, tour operators and shopping areas 

There is an unverified question of whether international tourism growth actually causes economic growth or does economic growth contributes to tourism growth instead. Empirical studies of the relationship between tourism and economic growth have been less rigorous in tourism literature (Oh, 2005). International tourism receipts are a major source of foreign exchange together with export revenues that well compensate current account deficits as well due to the fact that tourism spending serves as an alternative form of exports contributing to ameliorated balance of payments in many countries (Oh, 2005). On the other hand, since international tourism contributes to every sector of the economies, budget deficits also benefits from these activities via tax revenues. As McKinnon (1964) argues international tourism brings foreign exchange that can be used to import intermediate and capital goods to produce goods and services, which in turn leads to economic growth. Balaguer and Jorda (2002) prove the validity of tourism-led hypothesis for the Spanish economy where the Spanish economy is the second largest recipient of international tourist earnings (5.9% of its GDP) in the world after the United States (Oh, 2005). However, there is a question if this hypothesis can be proved for other countries. Therefore, the tourism-led hypothesis deserves further attention for the other economies

On the other hand, many studies in the literature proved the importance of international trade for economic growth well. Some support export-led hypothesis while others support import-led hypothesis for particular countries. Although results on the direction of relationship between international trade and economic growth are still again inconclusive (Balaguer and Jorda, 2002), these studies prove that international trade is crucial for economic growth of many countries (Shun and Sun, 1998; Xu, 1996; Jin, 1995; Bahmani-Oskooee and Alse, 1993, Marin, 1992; Chow, 1987). Recent theoretical literature provides two main mechanisms through which international trade may affect growth. The first is its effect on the rate of innovation. The second is its effect on the adoption rate of technologies from more advanced countries that also increases the economy's rate of total factor productivity growth

International tourism and international trade mean greater integration into the world economy which also brings benefits to the economies such as employment creation, foreign exchange earnings, government revenues, and income and employment multipliers (See also Clancy 1999). There have been numerous studies analyzing the effects of international tourism and trade sectors on especially developing economies. However, the linkages between international tourism and international trade did not find a wide application area in the literature (See Shan and Wilson, 2001). Do international tourist arrivals promote international trade, or does international trade promote tourist arrivals, or is there feedback causality among them? When international tourism leads to international trade, there will be an increase in import demand for foreign goods/services as well as an increase in export earnings through its service account of balance of payments. Another implication of international tourism for international trade is that it increases the image of domestic goods/services around the world which create new trade opportunities (Shan and Wilson, 2001; Kullendran ad Wilson, 1998). On the other hand, when international trade leads to international tourism, this might happen through business travel which in turn causes holiday travels at later stages as a result of greater trade opportunities. Therefore, the relationship between international tourism and international trade is another issue that deserves further attention from the researchers

Having the importance of this issue that deserves further attention, this study empirically investigates the possible co integration and causal link between international tourism, international trade and economic growth in a small island, the south of Cyprus, which has become a new member to European Union (EU) apart from May 1, 2004 and is a developed country with 15.1 billion US$ GDP and 20,701 US$ per capita income as of 2004 figures 

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