INVESTIGATION OF THE FACTORS AFFECTING TOURISM DEVELOPMENT PANEL CAUSALITY ANALYSIS: THE CASE OF BRICS COUNTRIES

This study investigates the causal relationships among the contribution of tourism income to GDP, international tourist arrivals, and capital investment in the travel and tourism sector in BRICS countries-Brazil, Russia, India, China, and South Africa-over the period 1995 to 2020. Using the Emirmahmutoğlu and Köse Panel Causality Test, which accounts for crosssectional dependence and heterogeneity among panel units, the study systematically examines both unidirectional and bidirectional causal linkages among the three core variables. The empirical findings indicate a robust bidirectional causality between capital investment in tourism and both the GDP share of tourism income and international tourist arrivals, substantiating the feedback hypothesis. Additionally, the analysis identifies a unidirectional causality from international tourist arrivals to the GDP share of tourism income, thereby supporting the tourism-led growth hypothesis (TLGH). These causal patterns underscore the reinforcing dynamics between tourism development and economic performance in emerging economies. Country-level analyses reveal distinct heterogeneities. Brazil and South Africa exhibit bidirectional causality between capital investment and tourism income, while China and Russia display unidirectional causality from investment to GDP share. In India, a bidirectional link is found solely between tourist arrivals and tourism income. Moreover, the direction of causality between tourist arrivals and investment differs: in Brazil, investment leads to arrivals, whereas in South Africa, arrivals lead to investment. China demonstrates neutrality in some relationships, indicating no statistically significant causal effect. The study presents targeted policy recommendations grounded in these findings. These include increasing tourism-related capital investment, improving infrastructure, expanding international marketing, and enacting tourist-friendly regulations. Specific proposals include enhancing eco-tourism and airport infrastructure in Brazil, and promoting heritage tourism in China. The study acknowledges limitations such as potential endogeneity, omission of post-2020 data-including pandemic - related disruptions - and the exclusion of sociocultural and environmental variables. Nevertheless, it offers strong econometric support for the role of tourism in advancing sustainable economic growth, particularly within diverse and evolving emerging market contexts like those of the BRICS nations.