Abstract
The purpose of this study is to investigate the impact of tourism on economic growth in Thua Thien Hue province in the period of 1997–2011. We used the growth of real gross domestic product (GDP) as a measure of economic growth and then disaggregated it into economic growth generated by tourism and other industries. Firstly, the paper presents a methodology for measuring the contribution of tourism to the Thua Thien Hue economy; secondly, we examined the impact of tourism earning on economic growth (GDP) in Thua Thien Hue province. We used unit root test, cointegration theory, Error Correction Model (ECM), and Granger causality test in order to identify the relationship between tourism and GDP both in the long-run and short-run. Findings conclude that tourism is one of the important reasons for economic growth in Thua Thien Hue province, Vietnam. The results of this study suggest that the government should focus on economic policies to promote tourism as a potential source of economic growth in that province in Vietnam.
Keywords: Tourism; Economic growth; GDP; VECM; Granger causality