Tourism-Led Growth in Shandong, China

This article investigates the impact of internal tourism on economic growth in Shandong, China, by segmenting the analysis into inbound and domestic tourism using the panel IV estimator. The results indicate that internal tourism contributes significantly to the growth of Shandong province, with domestic tourism having a comparatively more significant impact than inbound tourism. In addition to tourism, the study also found that interest and exchange rates hurt growth, while merchandise exports effectively promote economic growth in Shandong. Based on these findings, policymakers should aim to keep interest and exchange rates stable and competitive, adopt an expansionary monetary policy to encourage domestic investment in infrastructure and develop marketing plans to promote domestic tourism. Additionally, private tourism stakeholders should collaborate with public agencies to market and promote local attractions and offer discounted hotel accommodations to attract additional tourist arrivals and stimulate economic growth.