Is the tourism-led growth hypothesis valid after the COVID-19 pandemic? The case of Spain

Abstract

This paper analyses the validity of the tourism-led economic growth hypothesis (TLEGH) for the case of Spain after the COVID pandemic. Advanced tests (dynamic and nonlinear) of non-causality Granger are carried out on time series of tourist arrivals and income as well as the evolution of GDP between the period 1955-2022. After performing an analysis with data up to 2019, we then examine whether the introduction of COVID modifies the conclusions obtained using data up to 2022. As a novelty, our results contradict in some cases (denying the bidirectional relationship between tourism growth and economic development), and qualify in others (pointing out that the TLEGH remains in force only in periods of economic expansion) those obtained by previous literature.