The Contribution of Tourism Development to Economic Growth in the Iranian Provinces

Abstract: The main objective of this paper is to estimate the tourism impact on the economic growth of Iranian provinces over the period of 2000-2010. For achieving this aim, the panel data approach has been used to the economic growth modeling. The empirical findings show that tourist receipts have a positive impact on the economic growth in Iranian provinces. It was found that a 10 percent increase in the spending of tourists leads to a 1 percent increase in the GDP per capita. In addition, physical and human capital has positive effects on economic growth, while unemployment rate and consumer price index have negative effect on the economic growth. Finally, the results of this study indicate that the product elasticities are inelastic in Iran during the period of 2000-2010.