Title : THE INFLUENCE OF THE TOURISM SECTOR ON ECONOMIC GROWTH IN INDONESIA
Author: Anggita Permata Yakup,
Universitas Airlangga
Item Type : Thesis (Thesis)
Abstract
The tourism sector has an important role as a source of foreign exchange earnings, and can encourage national economic growth, especially in reducing unemployment and increasing a country's productivity. The tourism sector is one of the strategic sectors that must be utilized for tourism development as part of national development. Tourism development has the ultimate goal of increasing people's income which can ultimately improve community welfare and economic growth. Tourism development also encourages and accelerates economic growth. Tourism activities create demand, both consumption and investment, which in turn will give rise to activities for the production of goods and services. This research examines the influence of tourism on economic growth in Indonesia based on time series data during 1975 - 2017. This research uses a simultaneous equation model estimated with two stage least squares. The results show that tourism has a positive effect on economic growth and conversely economic growth has a positive effect on tourism. Other factors that influence tourism in Indonesia are the exchange rate and inflation. Tourism can increase foreign exchange earnings, create jobs, stimulate the growth of the tourism industry, therefore it can trigger economic growth, moreover it can encourage various countries to develop the tourism sector. Tourism contributes to economic growth through various channels including foreign currency earnings, attracting international investment.
Keywords: Tourism, Economic Growth, Two Stages Least Square
