Abstract
The main objective of this study is to investigate the causal relationship between tourism development and economic growth in Gulf Cooperation Council (GCC) countries in a multivariate model, using panel data for the period 1995-2012. The study adopts a panel Granger causality analysis approach to assess the contribution of tourism to economic growth in GCC countries as a whole, and in each individual country. In the case of GCC countries as a whole, the results show a one-way Granger causality, from economic growth to tourism growth. Furthermore, Kuwait, Saudi Arabia, Qatar, and the United Arab Emirates follow the path of economy-driven tourism growth, as hypothesized. The reverse hypothesis (i.e., tourism-led growth hypothesis) holds true for Bahrain, while there is no causal relationship between tourism and economic growth in the case of Oman.