The Role of Air Transportation, Hotels and Restaurants in the Relationship Between Tourism and Economic Growth

Despite the importance of the tourism industry in the economic growth, it should be noted that the development of appropriate infrastructures in tourism-related industries is a prerequisite for the development of this industry and it plays an important role in the relationship between tourism and economic growth. This study investigate the role of tourism related industries (including air transportation, hotels and restaurants) in the relationship between tourism and economic growth in Iran. The modeling of the research is based on the annual time series data of 1979-2019 by using generalized Method of Moments (GMM). The empirical results show that tourism improves Iran’s economic growth and increases GDP per capita. Also the development of air transport, hotels and restaurants has a positive impact on economic growth. On the other hand, the findings indicate that the development of tourism related industries (aviation, hotel and restaurant) increase the positive impact of tourism development on the economic growth. This result indicates that the degree of aviation, hotel and restaurant development is effective in the tourism- growth relationship and with the development of these subsidiaries, the intensity of this positive relationship will increase.