Relationship between Tourist Arrival and Foreign Exchange Earnings: The Case for Bangladesh

Abstract

Tourism is one of the promising sectors for Bangladesh. The success of tourism is measured by the increasing number of tourist arrival and foreign exchange earnings. The purpose of this paper is to investigate the relationship between tourist arrival and foreign exchange earnings. To evaluate the nexus between these two we apply the Johansen’s multivariate cointegration procedure. In this study we find that there exists long run relation between these two variables. Here, foreign exchange earnings are used to evaluate the contribution of tourism to the economic growth. Since, Bangladesh can maximize their economic benefits from tourism activity by earning more from the receiving more visitors. It implies that tourism effects economic growth positively through huge amount of foreign exchange earnings. So, the government of Bangladesh should take a long term tourism strategic plan and tourist arrival plan in order to rebound the economy of Bangladesh.

DOI: 10.5901/mjss.2014.v5n16p162