Investigating the Impact of Investment Space on Middle East Tourism Industry with Spatial Econometrics Approach

Undoubtedly, today the tourism industry is one of the most important sectors of the global economy that has been growing rapidly in world economic development. The result of this rapid growth has been the increase in annual growth rates in world GDP, exports, world trade, and services. The appropriate investment climate can sustain this industry. The investment climate is influenced by a set of factors related to legislative, regulatory, organizational, economic, social, political and other factors that determine the conditions of investment activity in a country, region or city. Therefore, this study examines the impact of tourism income on the investment climate in selected countries of the Middle East. Data were analyzed using the spatial Durbin panel model over the period 2016–2006 for 15 selected countries in the Middle East. The results showed that there is a significant spatial relationship among Middle Eastern countries. In other words, part of tourism revenue in the Middle East has been due to distance or proximity effects. Therefore, it is suggested to consider spatial correlations between observations in estimating econometric models because if they are not included in the model, the results of biasing are unreliable.