Causality between Foreign Direct Investment and Tourism: Empirical Evidence from India

Author: 
Saroja Selvanathan
E.A. Selvanathan
Brinda Viswanathan
Description: 
WORKING PAPER 46/2009
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Abstract: 
This paper investigates the causal link between foreign direct investment and tourism in India by employing the Granger causality test under a VAR framework. A one-way causality link is found from foreign direct investment to tourism in India. This evidence once again adds to the need for appropriate policies and plans to further expand and develop tourism given that FDI flow into India is expected to be strong in the coming years, bringing along a demand for tourism as well.