Exploring the linear and non-linear effects of tourism on economic growth in the Cabo Verde Islands: evidence from the ARDL and NARDL models

In this study, we examine both symmetrical and asymmetrical effects of tourism on economic growth in the Cabo Verde Islands through ARDL and NARDL models. Using quarterly data from 2007Q1 to 2023Q2, and relying on the bounds test for co-integration and the Toda-Yamamoto approach for Granger non-causality testing, we found a linear long run relationship between visitor arrivals and real GDP with a bidirectional causality. While long-run effects show no asymmetry, the short-run analysis reveals asymmetric impacts of tourism expansion on growth, with differing effects for positive and negative shocks. Policy recommendations include prioritising expansive, inclusive, and income-generating tourism projects to support sustainable and diversified growth in Cabo Verde.