Leading indicators for economics growth. Evidence from developed and developing countries

This study expands existing research by considering exports, tourism and energy consumption as potential leading factors for economic growth. While trade of goods has been proved as a means of growth for countries tourism, as a nontraditional export, has been neglected in the literature. Furthermore, there is a strong belief that economic development is driven by energy consumption. However, such a hypothesis has been recently tested in a bivariate framework with mixed results according to the country analysed. The aim of this paper is to employ data for a set of 88 developed and developing countries. The time span under investigation is from 1960 up to 2005. Exports of goods, tourism exports and energy consumption are considered a simultaneous system of equations. Two main hypotheses are tested: firstly, whether exports, tourism and energy consumption drive economic growth and secondly, if energy consumption leads to sustainable development. Cointegration and Granger causality techniques are applied within a panel data framework.