Applying an Evolutionary Growth Theory for Sustainable Economic Development: The Effect of International Students as Tourists

Abstract

In this globalized era of strict competition, all actors in countries must focus on their strengths for continuous growth, which would presumably lead to sustainable economic development. Amongst the three components of sustainable development, this paper focuses on the economic and social aspects. Many countries are becoming service-oriented for economic growth. Education is a form of human capital investment which significantly contributes to countries’ national income via students, particularly international cross-border students in higher education institutions. While endogenous growth models dismiss the importance of governments in the growth process, in this paper, the Keynesian and new growth theories are combined to form an evolutionary growth theory. This research aims to analyze the short and long-term relationships between macroeconomic variables, international students, and their impact on the gross domestic product (GDP) of a small island with the intention of policy implications for stakeholders to reach or maintain sustainable economic development. Using an evolutionary growth theory with 34 years of time-series data on quarterly base, the vector autocorrection (VAR) model helps reveal the short and long-run relationships as well as impacts on the economy for sustainable economic growth. The results confirmed a long-run relationship via cointegration. Moreover, they approved bidirectional causality between student numbers, general secondary school enrolment, and GDP. Findings suggest significant implications for all stakeholders, particularly for higher education institutions, the government, and local citizens due to the importance of micro and macro-economic variables’ effect on GDP. The results prove that educated human capital contributes to economic growth. Governments should continue their existing strategy regarding secondary school enrolment rates as it is found to be the most effective variable in the long-run. As education, knowledge, and information transfer rises, it contributes to sustainable development through promoting social stability. Limitation of the unavailability of the total yearly population, GDP was opted instead of GDP per capita.

Networks, Innovation and Knowledge Transfer in Tourism Industry: An Empirical Study of SMEs in Portugal

“…The SMEs that have participated in the study are unanimous in stating that HEIs may help tourism sector companies to create a competitive advantage in the market due to their knowledge, as stated by Soyer et al (2020). Company A confirms its availability to disclose data gathered over the years to bring the HEIs closer to the tourism companies.…”

“…The higher education institutions (HEIs) participate in the economic development of the regions where they are located (Soyer et al 2020). This scenario has brought countless opportunities (for example, licensing, research contracts, consulting services, better mobility with the industry) for the academic institutions.…”

Do Spanish Students Become More Sustainable after the Implementation of Sustainable Practices by Universities?

“…In this way, HEIs can prevent students from being overwhelmed by the nihilism and hopelessness of the current dramatic situation while promoting effective skills acquisition and values of connectedness between humans and nature [29]. Therefore, HEIs are a key part of society because they hold the power to promote both economic growth and sustainable development given that "a highly educated human capital will benefit employment opportunities, enhance competitiveness, and could be a catalyst for sustainable economic growth" ( [30], p. 22).…”

Poverty—A Challenge for Economic Development? Evidences from Western Balkan Countries and the European Union

“…The efforts of international institutions and public authorities on sustainable development can also support the process of reducing poverty and increasing the wellbeing of the population. Given the complexity of the phenomenon and its implications, the tools to achieve these objectives are various and require long-term actions [5][6][7][8][9][10][11][12][13]. Reducing poverty is not just linked to the economic conditions; it is an integrated process also including environmental, social, ethical, legal and other issues depending on the international sphere.…”