Asian Journal of Economics, Business and Accounting

This study investigated the effect of international tourism development on economic growth in Zimbabwe, using time series data spanning over the period 1980 to 2017. The main aim of the study was to examine whether international tourism is a pathway to economic recovery in Zimbabwe. The study adopted the tourism growth model proposed by Balaguer and Cantavella-Jorda [1] and applied the Autoregressive Distributed Lag (ARDL) bounds testing approach and its associated Error Correction Model (ECM). The direction of causality between international tourism and economic growth was examined using the Granger causality test in an error correction framework. The findings of the study show that the Tourism-led Growth Hypothesis (TLGH) is valid both in the short-run and long-run while the Economic-Driven Tourism Growth Hypothesis (EDTGH) is valid in the long-run only. This implies that the resource allocation strategy for the Government of Zimbabwe should prioritize both international tourism and economic expansion. The study, therefore, recommends that the Government of Zimbabwe should allocate resources towards supporting the tourism sector to stimulate economic growth in the country. On the other hand, the study, guided by the validity of the EDTGH in the long run, suggests that the Government of Zimbabwe should also consider allocating resources to other sectors currently driving the economy, for example, the agriculture and manufacturing sectors; as this will stimulate economic expansion in the long run.