ABSTRACT. This study has examined the relationship between tourism develop- ment, employment and economic growth – using the recently developed ARDL-bounds testing procedure. Specifically, the study attempts to examine whether the development of tourism sector in Zambia leads to economic growth. In an attempt to redress the weakness associated with a bivariate analysis, the study incorporates labor force participation as a third variable in a trivariate setting. The empirical results show that there is a distinct causal flow from tourism development to economic growth in Zambia. In the main, the results of this study support the tourism-led growth hypothesis. The findings of this study are not only consistent with the previous studies on this subject, but also support the current Zambian government initiative of boosting the tourism sector in order to promote economic growth. Other results show that there is a unidirectional causal flow from labor force participation to economic growth – and from tourism development to labor force participation. These results apply, irrespective of whether the causality is estimated in the short run or in the long run. pp. 87–100
JEL Classification: L83, N1, O47


Keywords: Zambia, tourism development, labor force participation, economic growth 

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University of South Africa

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