The Role of ICT Indices in Tourism Demand of Iran (The FMOLS Co-integrating Approach)

Information and Communication Technology (ICT) is one of the main determinants of E-commerce industry such as tourism sector in developing countries like Iran. For this reason, the main purpose of this paper was to investigate the short-run and longrun relationships between ICT indices such as internet users, government expenditures on ICT to the GDP and mobile cellular subscription in Iranian economy during the period 1994 to 2015. The empirical model was estimated by applying Fully Modified Ordinary Least Square (FMOLS) co-integrating method as a sophisticated econometric methodology. The results of the empirical model indicated that there was a long-run relationship between ICT indices and tourism demand indicators like the number of tourist arrival in Iran. Moreover, the other explanatory variables such as living cost, real exchange rate and behavioral habit had negative and positive effects on the tourism demand respectively. The investment of government in ICT indices such as improving the share of ICT expenditures in GDP and enhancing the ICT quality are the important policy implications of this study. to the economic policy makers.