Relationship between financial development and inbound tourism : a revisit

In this study, we use a more accurate and comprehensive indicator of financial development to examine the link between financial development and tourist arrivals and expenditures in the top 20 tourist destination countries over the period of 1995– 2017. By applying the panel augmented mean group method and controlling for other determinants of tourist arrivals, the overall results revealed that financial development positively influences tourism development. On the contrary, economic growth and countries price levels have no significant effects on tourism development. At the country level results; financial development has positive effects on tourism development in most countries. However, gross domestic product growth and consumer price index have a significant in few countries only. Therefore, the outcome of this study reveals that that visitors do not consider the development and the price level of the country but rather the facilities available including the facilities in the financial structures.