Modelling investment in the tourism industry using the World Bank's good governance indicators

Foreign direct investment has been extensively recognised as an important resource of economic growth. Governments have been playing an active role in encouraging this type of investment. Despite efforts by governments, only a few countries have been successful in attracting investment for their tourism industry. The purpose of this paper is to detect meaningful relationships between government policies and investment.

This study utilizes statistical and machine learning techniques. A predictive model has been constructed and evaluated using a set of countries, which differ from those putatively used for model generation. Good governance indicators, together with data about investments in the tourism industry, are the main instruments used in the model.

The findings suggest that the formulation and implementation of sound policies, together with regulations, promotes the development of a private sector; and the private sector has a significant role in attracting tourism investment.

The study contributes to research in the tourism industry by using intelligent data analysis techniques.

The availability of comprehensive datasets and a very limited set of empirical studies, related to investment in the tourism industry, has stimulated this research to focus on integrating quantitative resources and assessing the significance of government policies.