The role of foreign direct investment in the relationship between economic growth and tourism revenue in Vietnam

Abstract

In this study, we shed light on the causal relationship between tourism revenue (TOV) and economic growth (GDP) during the period from 1995 to 2020 and then analyze the role of Foreign Direct Investment (FDI) in explaining the movement of the TOV-GDP relationship within the Quantile-on-Quantile Regression (QQR) and Granger causality in different quantiles frameworks. The results from the QQR indicate that TOV and FDI remarkably impact economic growth in different quantiles. More specifically, the Granger causality test findings suggest a bidirectional association between the concerned variables at divergent quantiles exists. The consistency of the results uncovers that the estimates are reliable and appropriate for supporting strategies aimed at increasing economic growth in Vietnam.