Granger Causality between International Tourism and International Trade

Abstract

International trade and tourism are both key industries that contribute significantly to the global economy. International trade can promote international tourism by increasing travel accessibility and affordability, helping to promote the availability of diverse tourism products and services, facilitating infrastructure development, creating job opportunities in the tourism sector, and facilitating intercultural communication and understanding between nations. International tourism can also stimulate international trade by generating foreign exchange earnings for the host country, encouraging the export of tourism-related products and services, creating job opportunities and supporting the growth of small and medium-sized businesses, and resulting in the import of goods and services required by the tourism industry. Using the Granger causality test, this study explores the causation between these variables in the context of the Russian economy from 1990 to 2017. According to the findings, there is bidirectional correlation between international tourism and international trade. The conclusions of this study indicate that both industries are inextricably intertwined and rely on one another to maintain the Russian economy's growth and development.