The Role of ICT indices in Tourism Demand of Iran (The FMOLS Co-integrating Approach)

Abstract

The ICT is one of the main determinant factors of e-commerce industry such as tourism industry in developing countries like Iran. For this purpose, the main objective of this paper is to investigate the long-run relationship between ICT indices such as internet users, government expenditures on ICT to the GDP and mobile cellular in Iranian economy during the 1976-2014. The empirical model has been estimated by applying FMOLS co-integrating method as a sophisticated econometric methodology. The results of empirical results indicate that there is a long-run relationship between ICT indices and tourism demand indicators like number of tourist arrival in Iran. Moreover, the other explanatory variables such as living cost, real exchange rate and behavioral habit have negative and positive effects on the tourism demand respectively. The investment of government in ICT indices such as improving the share of ICT expenditures in GDP and enhancing the ICT quality are the important policy implications of this study