http://drr.vau.ac.lk/handle/123456789/241 2026-07-06T22:16:45Z http://drr.vau.ac.lk/handle/123456789/2124 The Nexus Between Tourism and Economic Growth in Sri Lanka: Evidence from an ARDL Bounds Testing Approach Ravinthirakumaran, N.; Thennakoon, D. This study investigates the nexus between tourism and economic growth in Sri Lanka from 1990 to 2021 using the Autoregressive Distributed Lag bounds testing approach. GDP growth is employed as the dependent variable, while tourism receipts, labor force participation, gross capital formation, and inflation are considered explanatory variables. Unit root properties are examined through the Augmented Dickey-Fuller test, and multicollinearity is assessed via the Variance Inflation Factor. The Bounds Test confirms a long-run relationship among the variables, while the Error Correction Model captures short-run dynamics. Empirical findings reveal that tourism receipts, labor force participation, and gross capital formation exert positive long-run effects on economic growth, whereas inflation negatively influences growth. Short-run estimates suggest that labor force participation and gross capital formation stimulate growth, though tourism shows limited immediate impact. Importantly, Granger causality tests demonstrate bidirectional causality between tourism and economic growth, validating both the tourism-led growth hypothesis and the economic-driven tourism hypothesis. Additionally, investment and labor force participation are identified as key transmission mechanisms linking tourism with broader macroeconomic performance. The results highlight the strategic role of tourism in driving sustainable growth in Sri Lanka, underscoring the need for policies that strengthen infrastructure, investment, and labor market participation. 2026-01-01T00:00:00Z http://drr.vau.ac.lk/handle/123456789/2123 Economic Implications of the Recent Middle East Conflict for Sri Lanka: GDP Growth, Inflation, CA Balance, and Foreign Exchange Stability Premaratna, S.P.; Ravinthirakumaran, N.; Francis, S.J. This study examines the macroeconomic implications of the ongoing Middle East conflict for the Sri Lankan economy, with a particular focus on key transmission channels including energy prices, remittances, trade, and external sector stability. Using annual time-series data from 2000 to 2025, the paper employs an Autoregressive Distributed Lag (ARDL) framework to estimate both short-run and long-run relationships between global oil price shocks, remittance inflows, and major macroeconomic indicators such as GDP growth, inflation, exchange rate dynamics, and the current account balance. The empirical findings confirm that oil price shocks exert significant adverse effects on economic growth while simultaneously increasing inflationary pressures and external imbalances. In contrast, remittances play a stabilizing role by supporting foreign exchange availability and domestic demand. The results highlight that Sri Lanka’s macroeconomic performance is highly sensitive to external geopolitical developments due to its structural dependence on imported energy and migrant labour income. To complement the econometric analysis, the study develops scenario-based simulations under moderate, escalated, and severe conflict conditions. The results indicate that a prolonged conflict could significantly weaken economic growth, accelerate inflation, depreciate the exchange rate, and widen the current account deficit. These findings underscore the vulnerability of Sri Lanka’s recovery trajectory in the face of external shocks. The paper concludes by emphasizing the need for proactive and forward-looking policy measures, including energy diversification, export market expansion, strengthening of remittance channels, and prudent macroeconomic management. Overall, the study contributes to the policy discourse by providing evidence-based insights into how geopolitical instability in the Middle East can influence small, open, and import-dependent economies such as Sri Lanka. 2026-01-01T00:00:00Z http://drr.vau.ac.lk/handle/123456789/2122 The Role of Taxation in Driving GDP Growth in Sri Lanka: ARDL Bound Test Iresha, M.; Anjale, J.; Ravinthirakumaran, N. This study examines the relationship between taxation and economic growth in Sri Lanka over the period 1991 2023, with a particular focus on both short-run dynamics and long-run equilibrium effects. Employing the Autoregressive Distributed Lag (ARDL) bounds testing approach and an Error Correction Model (ECM), the analysis captures the distinct temporal impacts of tax revenue, inflation, monetary expansion, and trade openness on GDP growth. The results reveal that tax revenue exerts a statistically significant positive effect on economic growth in the long run, underscoring the importance of efficient revenue mobilization and productive public expenditure. Inflation, by contrast, shows a persistent negative association with long-run growth, highlighting the necessity of maintaining price stability. Monetary expansion is found to stimulate growth in the short run but exerts a dampening effect over the long term when excessive liquidity persists. Trade openness contributes positively to long-run growth, although adjustment costs are evident in the short run. Policy recommendations emerging from the findings include broadening the tax base, enhancing tax administration efficiency, adopting a low and stable inflation framework, maintaining a balanced monetary stance, and pursuing export diversification with strengthened domestic value chains. Institutional reforms to reduce leakages and improve compliance are also emphasized. Overall, the study demonstrates that harmonizing fiscal, monetary, and trade policies is essential findings provide empirical insights for policymakers aiming to optimize tax policy as a lever for long-term economic resilience 2026-01-01T00:00:00Z http://drr.vau.ac.lk/handle/123456789/2121 Reasons Behind Back Sourcing Decision in Facilities Management Services: Expert Survey of Sri Lankan Cases Rukshan, A.; Premanathan, T. Global interest in back sourcing has risen due to outsourcing failures, yet research on back sourcing in the facilities management services is limited. This study aims to identify back sourcing reasons in facilities management services in Sri Lanka. Four industries including food, apparel, private hospital, and hotel were chosen to conduct an expert survey interview from middle managers who have been involved in the back sourcing process of the facility management services. Data were analysed through content analysis. Findings revealed that dissatisfaction with service quality often initiates back sourcing; high costs and poor service quality were common reasons. Additionally, organizational changes, such as management shifts and strategic adjustments, along with changes in vendor structure and strategies due to external factors, influenced the decision to bring outsourced functions back in-house. This study explores the nuanced dynamics of back sourcing decisions in the facilities management services in Sri Lanka. 2026-01-01T00:00:00Z