How does financial inclusion influence tourism demand? Empirical evidence from emerging markets and developing economies

The extant tourism literature has identified a range of economic, geographic, political, and social factors impacting tourism demand. However, existing research has ignored how financial inclusion influences tourism demand, especially in the context of emerging markets and developing economies (EMDEs). We make an empirical contribution in this paper by being the first to distinctly capture the impact of financial inclusion on tourism demand for 85 EMDEs across the world, spanning the time-period of 1995–2017. Using various measures of financial inclusion, we find robust evidence to support our conjecture that higher financial inclusion strongly augments higher tourism demand in an unambiguous manner. Our results also show that the impact of financial inclusivity is not non-linear, implying that financial inclusion in its entirety plays a crucial role in supporting countries to generate more tourism revenues regardless of their levels of financial inclusion, which has significant policy implications.