THE IMPACT OF INTERNATIONAL TOURISM ON TRADE AND ECONOMIC GROWTH: THE CASE OF UZBEKISTAN

This study empirically examines the dynamic relationships among international tourism, international trade, and economic growth in Uzbekistan over the period 1995–2023. Using annual data and applying the Johansen cointegration framework and Vector Error Correction Model (VECM), the research investigates whether international tourist arrivals exert long-run and shortrun effects on real GDP and trade volume. The analysis incorporates key macroeconomic variables, including gross capital formation, foreign direct investment, trade openness, and the real effective exchange rate. Unit root tests confirm that all variables are integrated of order one, I(1), allowing Johansen’s methodology to test for multiple cointegrating relationships. The results reveal at least one stable long-run cointegrating vector linking international tourism with both economic growth and trade. Long-run coefficients indicate that tourism significantly and positively influences GDP, with a 1% increase in tourist arrivals associated with approximately a 0.32% increase in real GDP. Tourism also exhibits a long-run positive impact on international trade, supporting the tourism–trade complementarity hypothesis. VECM short-run dynamics show that deviations from long-run equilibrium correct at a moderate speed, with the error correction term negative and statistically significant. Granger causality tests confirm bidirectional causality between tourism and GDP in the short run, while tourism unidirectionally causes trade in both the short and long run. Diagnostic testing confirms stability, normality, and absence of serial correlation. Overall, the findings suggest that international tourism acts as a strategic driver of economic development and trade expansion in Uzbekistan, supporting policies that enhance tourism infrastructure, liberalize travel regimes, and integrate tourism into the country’s export diversification strategy.