Testing for cointegration using data covering over the period 1967-2010, the study was able to establish the existence of long-run relationships between tourism receipts and gross domestic product in el Salvador. Moreover, the granger Causality test does confirm the existence of a unidirectional causality running from tourism to economic growth. The elasticity value of gross domestic product with respect to tourism receipts indicates that a 1% of a sustained growth in tourism receipts, in the long run, would lead to an estimated increase in el Salvador economic growth of near 0.64%, ceteris paribus. The nonsignificance of the exchange rate indicates that tourism development bears the task of the short-run adjustment to a long-run equilibrium. Our results, without generalizing, are consistent with other findings. These findings are important for el Salvador (eS) policy makers, in terms of its tourism policy formulation, in terms of its tourism policy management, and in terms of its overall economic growth. The above estimates point in the direction that enhancing tourism development both can have the presence of strong multiplier impacts and can be important for the economic growth of eS economy. One limitation to this type of analysis is the appropriate definition of the tourism development variable, or of the economic growth variable, or of any other economic variable. This limitation is a difficult one.
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