Investigating the Factors Affecting Tourism in D-8 Member Countries Using the Generalized Method of Moments (GMM)

Abstract

In today’s world, the tourism industry, as one of the largest and cleanest industries globally, occupies a distinctive position and constitutes one of the most important sources of foreign exchange earnings. Tourism has played an important role in encouraging investment in infrastructure, generating government revenue, and creating direct and indirect employment worldwide. The impact of the tourism industry on the prosperity of domestic industries and the expansion of international cooperation has changed countries’ attitudes toward tourism and has given it an important place in government policymaking. Accordingly, examining the factors influencing tourism has become highly important in economic studies. In this regard, the present study employed the generalized method of moments to investigate the effects of five determinants—financial development, good governance, gross domestic product, the exchange rate, and the inflation rate—on tourism revenue as an indicator of tourism in D-8 member countries over the period 1996–2024. According to the results obtained from the model estimation, all the study variables had positive and statistically significant effects on the tourism indicator.