Examining the Tourism-Led Growth Hypothesis, Agricultural-Led Growth Hypothesis and Economic Growth in Top Agricultural Producing Economies

Most nations are striving to achieve sustainable economic growth. Among the diverse routes explored are tourism and agriculture. This study examines tourism-led growth hypothesis and agriculture-induced growth hypothesis in the context of the world top four agricultural producing economies in a multivariate balanced panel framework between 1995 and 2015. The findings from the bootstrap panel co-integration tests do not support a long-run relationship among the variables. Subsequently, causality test reveals a feedback relationship between international tourism receipt and economic growth. Thus, the tourism-led growth hypothesis is affirmed, while a uni-directional causality runs from agriculture to economic growth. Our findings affirm both the tourism-led and agriculture-led growth hypotheses. Hence, tourism and agriculture sectors are twin growth catalysts in the selected states, that is, both tourism and agriculture sectors have complementary effect on economic growth in the bloc investigated. © 2019 Varna University of Management. All rights reserved


Introduction
Tourism has been one of the fastest-growing industries globally, primarily due to its uninterrupted growth in the past decades. Despite occasional shocks and financial crises, the industry has grown over time,

World development indicator
Agricultural value added AVA All output from agricultural subsector namely, crop production, husbandry, fishery and livestock.

World development indicator
Effective exchange rate EXR The value of a currency against an allotted weighted average of several foreign currencies divided by a price deflator or cost index.

World development indicator
International tourism receipt TR The expenditure by international inbound visitors, including payment to national carriers for international transport World development indicator demonstrating its strength and resilience. The tourism industry forms an integral part of socioeconomic progress both in developing and developed economies through its inherent ability to create jobs, facilitate enterprise startups, generate export revenues, and promote infrastructural development (Liu & Song, 2018).
The tourism-led growth hypothesis (TLGH) is well documented in the tourism economics literature. The seminal study of Balaguer and Cantavella-Jorda (2002), where the pertinent role of tourism in the Spanish economy was empirically explored, served as an invitation to numerous studies (see Yildirim & Ocal, 2004;Campos & Sequeira, 2005;Yorucu & Mehmet, 2011;Akadiri et al., 2017;Alola & Alola, 2018;Roudi et al., 2018;Sokhanvar et al., 2018). However, there has been no consensus among scholars in their findings. It is on this premise that this study seeks to explore if the TLGH holds for the top agricultural producing countries.
This study aims to empirically address the above-mentioned objective since a study that provides a clear insight into TLGH in top agricultural producing countries will be of interest to both policy and decision makers. Besides, a more robust understanding of this interplay with other contextual factors will guide future TLGH implementation. Extant empirical studies on TLGH have not only extensively explored the causal linkage between tourism receipts and economic growth, but also between tourism receipts and other macroeconomic variables (see Tang et al., 2007;Akinboade & Braimoh, 2010;Husein & Kara, 2011;Amaghionyeodiwe, 2012;Brida et al., 2016). The knowledge gaps this study seeks to fill can be classified by scope of analysis and econometric techniques applied. First, we test the TLGH by focusing the scope on a bloc of four large agricultural producing economies reputed for exportation of agricultural commodities (Brazil, Russia, China and the United States, hereafter collectively referred to as BRCU). Second, we seek to verify simultaneously if the twin-growth driverstourism and agriculture-spur economic growth in the long-run. Third, we utilize the secondgeneration panel approach which adequately deals with the challenges posed by countryspecific heterogeneity and cross-sectional dependency.
The countries under investigation represent the top three agricultural producing economies and are also the largest exporters of agricultural commodities in the emerging markets, while the United States is included as the largest exporter of agricultural commodities in the world. Therefore, the combined analysis of these two groups of countries allows us to test for the validity of tourism-led and agriculture-led growth models in the agricultural producing states.
The rest of the paper proceeds as follows; section 2 discusses the data and methodology, section 3 presents the results and discussion, and finally, section 4 concludes the study.

Data and Methodology
To test the TLGH, the time dimension is made    (2012) approach.

Results and discussions
The results from the first stage of the empirical analysis (tests for cross-sectional dependence) are reported in Table 2. The results mainly reject the null hypothesis of cross-sectional independence and confirm the presence of CSD. Thus, we infer interdependence among BRCU countries. The need to account for CSD in subsequent studies in order to circumvent spurious analysis is therefore confirmed.
Next, panel unit root testing as proposed by Pesaran (2007) is executed and the outcomes are reported in Table 3. For the stationarity test, the null hypothesis of unit root could not be rejected at level for the variables. However, after first differencing, the null of unit root was rejected in all the variables. Thus, the variables are integrated of order one i.e.(1). It is essential to conduct unit root tests in order to avoid spurious regression, and by extension, erroneous inferences.
The study further proceeds to investigating the long-run relationship (if any) among the variables under review. It is noteworthy that the so-called first-generation cointegration tests are inconsistent in the presence of CSD. This research study therefore relies on secondgeneration panel cointegration testing as proposed by Westerlund (2007). The test is able to accommodate slope heterogeneity and interdependence within the cross-sections under a null specification of no cointegration. Table 4 reports the panel cointegration test results. Based on the test outcomes, the null of no cointegration could not be rejected even at 10% significance level in all the cases. We therefore find no evidence in support of a longrun relationship between the variables under review.
Finally, this study applies the Dumitrescu-Hurlin (2012) Granger causality test to detect causal relationships among the variables. As shown in Table 5, causality relationship runs from international tourism receipts to economic growth, thus validating the tourism-led growth hypothesis for the bloc of countries under consideration. The dynamic causality also reveals a uni-directional causality running from agricultural production to economic growth, hence validating the agricultural-induced growth hypothesis. That is, in this bloc of countries, the agricultural sector contributes to national prosperity.

Conclusion
This study employs second-generation panel estimation techniques to examine TLGH in top agricultural producing economies while controlling for effective exchange rate. The study period is from 1995 to 2015.
To ascertain the effectiveness of our analysis, we accounted for CSD and stationarity properties of the variables under consideration. The cointegration test showed and established the presence no conitegration. The causality test further showed a bi-directional causality running from international tourism receipt and economic growth, thus affirming the TLGH. This is in line with the findings of Brida and Risso (2009) Our study also validates the agriculture-led growth hypothesis (ALGH). This reinstates the importance of agriculture to economic growth in the sampled countries. This finding corroborates the conclusion reached by Sertoglu et al. (2017) that agriculture is considered as panacea for long-term economic growth. The reason for the validity of TLGH in the bloc of selected top agricultural producing economies could be because these states are also exporters of agricultural produce. These twin factors (tourism and agriculture) are revealed as significant growth catalysts in the selected states. This affirms the finding of Torres (2002Torres ( , 2003.
Also insightful from the causality test was the unidirectional causal effect running from agricultural production to economic growth. This supports the fact that tourism alone may not be sufficient to sustain economic growth. The above revelation affirms that both tourism and agriculture sectors have complementary rather than substitutive effect on economic growth in the bloc of countries reviewed. This study therefore also strongly recommends that policy makers and stakeholders should adopt long-term policy strategies and policy mix that aid development in both agricultural and tourism sectors.
Several decades of TLGH research has advanced the knowledge base of how tourism shapes and develops the economy. However, there is limited knowledge on how tourism and agriculture interact to foster economic growth. Although a handful of studies have explored TLGH, a clear understanding of TLGH from the perspective of top agricultural producing states is largely lacking. In this sense, we believe that our research is especially timely in the aftermath of the global financial crisis of 2007-2009.