Post-Pandemic Recovery Measures to Ensure Socio Economic Sustainability through FDI in Smart tourism
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Abstract
Tourism is the major source of revenue for most of the island nations and it is recognised under the service sector.This chapter calls for the adoption of the new normal tourism business strategies in the island nations and mainland destinations which are more vulnerable to the pandemic situations.Due to the Covid-19 pandemic the socio economic sustainability in many countries that receives revenue from tourism are shaken.Srilanka has seen a worst financial crisis due to the, pandemic and its negative effects on its tourism sector. Sensitising the countries to think of technology integration in tourism through Foreign Direct Investment(FDI) to ensure socio economic stability is the need of the hour.For the current study , the annual data of World Bank for the period from 1979- 2020 has been considered for analysis.ARDL model is used as it simplifies the long run causation by presenting the cointegration value and the short-run causation by presenting the Error correction term. Additionally, to find out directional causality in the short run, ‘Granger causality’ is performed. The causal effects of Percapita Growth rate and Foreign exchange earnings from inbound tourism for five countries (China, India, Srilanka, Singapore(Asia) and Spain(Europe)) has been found along with the causal effect of FDI and Percapita Growth rate to arrive at the results for propagating the necessary policy implications.The results of the causal analysis recommends the need for FDI to encourage smart tourism and to ensure socio economic sustainability in future.