Socio-Economic Determinants of Tourism Development in Pakistan

The objective of this paper is to explore the association between the socio-economic factors and the tourist industry Pakistan. We used secondary time series data for the period 1980-2017. Number of Tourist Arrival has taken as the Dependent variable while Gross Domestic Product, Infrastructure (length of roads and railway tracks), Terrorism (number of terrorist incidents per year), Tax Revenue and Development Expenditure are taken as independent variables. In order to determine both long term and short term relationship among the variables, we have used ARDL and ECM. The Bound test techniques. Our results show that tax concession, better infrastructure, control of terrorism and development expenditures have positive impact on the arrival of number of foreign and native tourists and consequently GDP will also increase. Thus, we suggest that the Government of Pakistan should take proper initiatives to generate valuable foreign exchange through tourism by providing necessary incentives to tourists' promoters.