| Abstract: |
This study investigates the relationship between sustainable tourism practices
and economic growth in Pakistan by integrating the principles of endogenous
growth theory with robust econometric modeling. Pakistan possesses significant
but underutilized tourism resources, including natural landscapes, historical
sites, and cultural heritage. However, its tourism sector faces persistent
challenges such as political instability, poor infrastructure, and limited
environmental planning. Using (International Monetary Fund, Pakistan Bureau of
Statistics, World Bank) annual data from 1995 to 2021, this research employs
ordinary least squares, autoregressive distributed lag bounds testing, and the
vector error correction model to examine how tourism receipts, employment in
tourism, political stability, and environmental sustainability influence real
GDP. The empirical findings reveal a statistically significant and positive
relationship between tourism receipts and GDP growth, reaffirming tourism’s
role as a direct driver of economic development. Employment in the tourism
sector also demonstrates a meaningful contribution to economic output by
enhancing household income and stimulating local consumption. Political
stability and environmental sustainability, while less impactful in the short
run, are found to be crucial in maintaining long-run equilibrium and ensuring
sustainability in the tourism sector through different tests and approaches as
concluded in the findings paragraphs. The autoregressive distributed lag model
confirms the existence of long-run cointegration among the variables, while
the vector error correction model illustrates a moderate but stable adjustment
toward long-run equilibrium. This study underscores the need for Pakistan to
adopt a coordinated, sustainability-focused tourism policy that emphasizes
investment in infrastructure, environmental regulation, institutional reform,
and community engagement. It advocates for shifting from volume-based to
value-driven tourism strategies. The strategy uses green practices, digital
promotion, and decentralized governance to maximize benefits. The findings
contribute empirical and policy insights for integrating tourism into national
development agendas. Ultimately, sustainable tourism emerges as a strategic
avenue for comprehensive, resilient, and environmentally sound economic growth
in Pakistan. |