The Analysis of the Economic Effects of Investment in the Tourism Industry of Razavi Khorasan Province: An Application of the Two-Region Input-Output Model

Abstract

This research investigated the direct and indirect effects of an investment in tourism sub-sectors in Razavi Khorasan Province on the value added of other economic sectors of Razavi Khorasan Province and other provinces by the input-output approach. Therefore, the FLQ-RAS method was developed to prepare the two-region input-output table of Razavi Khorasan Province and other national economies based on the input-output table of 2016. We used a non-statistical method to prepare the input-output coefficients and the two-region model. The results indicate that the simultaneous increase of 700 billion riyals in tourism-related sectors in the Razavi Khorasan province directly affects wholesale and retail activities, other ground transportation, and governmental human health activities. Also, in terms of increasing investment in every tourism activity, government human health creates the most significant overall effect compared to other activities, wholesale and retail activities, as well as administrative activities, and support services, have the second and third ranks of influence from the increase in investment. Also, the actions of government human health, Accommodation and Wholesale, and retail, except motor vehicles and motorcycles have experienced the most direct effects from investment.