Tourism plays a significant role in the economic growth of a country. Considering the cultural, natural, and historical attractions of Iran, it is necessary to take effective steps to attract foreign tourists in order to increase the economic growth of Iran. This study examines the impact of tourism on economic growth within the framework of the neoclassical growth model for the years 1980_2015. To test the reliability of the variables, Dickey-Fuller test and Zeut-Andrews structural failure test are used. To estimate the long-term and short-run relationship between economic growth and tourism, Johansen co-integration test and Vector Error Correction Model (VECM) tests are conducted using Eviews software (V.9).

Our empirical findings indicate that the impact of tourism on Iran’s economic growth is far higher in Malaysia in the short and long term, reflecting the potential of tourism in the country, which can have a direct and indirect effect on economic growth. And the policy makers should strive to develop tourism in Iran.

Tourism; economic growth; Iran; Malaysia