TOURISM AND ECONOMIC GROWTH: SPATIAL PERSPECTIVE

As Indonesian people have shifted their focus towards leisure activities, tourism has become a prospective sector for economic development in many regions of the country. This study analyses whether spillover of tourism growth occurs or not and the impact of the tourism sector on gross domestic regional product (GDRP) in 33 provinces of Indonesia compared to their neighbours. In particular, this study aims to identify what factors influence tourism development and to estimate the impact of tourism growth on regional economic growth. Spatial analysis was performed using Moran's I test and spatial regression. The results show a positive spatial spillover of tourism among 33 provinces. Furthermore, accommodation, tourism labour productivity and education have a positive significant effect and increase the number of tourists in a province. However, investment and budget utilization for public infrastructure are not significant. Furthermore, the number of foreign tourist has positive significant value, while domestic tourist not significant to GDRP growth.