This paper investigates the causal relationship between tourism and economic development using a sample of 123 countries from 1995 to 2019. Employing the Dumitrescu and Hurlin adaptation of the Granger causality test, the study critically examines causal analysis with heterogeneous panels. Results reveal a one-way causal relationship from tourism to development in countries with low tourism specialization and development, and a one-way causal relationship from development to tourism in countries with high development and tourism specialization. The study highlights the limitations of generalizing findings from heterogeneous panels.

Pablo Juan Cárdenas-García, Juan Gabriel Brida, Verónica Segarra