Investigating the Effects of Advancements in Information and Communication Technology and Financial Development on Tourism Growth: A Case of South Africa

Abstract Research background South Africa’s tourism industry has been experiencing unstable growth in the past few decades due to different factors. Studies in different countries have documented the significance of information and communications technology (ICT), and financial development towards a country’s tourism growth. ICT and financial development may stimulate the growth of South Africa’s tourism industry. Purpose To investigate the extent to which ICT advancements and financial development influence tourism growth in South Africa, given that the country has relatively strong financial and ICT sectors. Research methodology The study used annual time-series data for the period 1989 to 2019, and the variables are financial development, ICT, and tourism growth. The data were analysed using the Autoregressive Distributed Lag (ARDL) model. Results The findings indicate the existence of a long-run relationship among the variables. Results for the long-run estimates show that only ICT has a positive and statistically significant effect on tourism growth. In the short-run, financial development has a positive significant effect on tourism growth, while ICT only registers a significant effect on tourism growth in the fourth lag, albeit negative. The policy implication of these results is that the South African government ought to promote financial development to ensure that money is available and accessible for investment in tourism businesses and for tourist spending. Furthermore, ICT upgrades are required by the government and tourism service providers to enhance tourism products and service accessibility for tourists from wider geographical locations. Novelty This study expanded the existing literature by assessing the effects of ICT and financial development on South Africa’s tourism.