Master in Economic Development and Growth The contribution of tourism development to economic growth of Sweden: A panel data approach Vladana Ajvaz
[email protected] Abstract: By using panel data for 21 counties in Sweden from 2003 to 2013, the purpose of this study is to examine the relationship between tourism development and economic growth in this country, within the neoclassical growth framework. To address the objective of this study, the appropriate panel data methods are used, namely both static and dynamic panel approaches. The results show that tourism is a positive and significant determinant of Swedish economic growth. Moreover, the tourism coefficient proves its robustness through majority of performed estimations. Therefore, this study supports the existence of the tourism-led growth hypothesis in this Scandinavian country, which is in line with our expectations. Hence, macroeconomic policies that promote tourism expansion will directly stimulate economic growth and this is expected to happen in the future since Swedish tourism capacity is still not used at its full potential. Key words: Tourism, economic growth, panel data, Sweden EKHM52 Master thesis, second year (15 credits ECTS) August 2015 Supervisor: Lars-Olof Olander Examiner: Kerstin Enflo Word Count: 14331 Website www.ehl.lu.se Content List of figures ......................................................................................................................................2 List of Tables .......................................................................................................................................2