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Does Trade Help to Explain Tourism Demand? The Case of Portugal

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Author Info

  • Nuno Carlos LEITÃO

    (Polytechnic Institute of Santarém, ESGTS, Portugal)

Abstract

The tourism industry has expanded in recent years due to internal and external environmental forces. These forces, income, trade, consumer price, and geographical distance are interconnected. Accounting for imperfect competition and increasing returns to scale, the new trade theory offers the explanation of dynamic gains from international trade. A large number of studies attempt to test the hypothesis that there is a link between trade and tourism. Most of the studies show that trade and tourism are positively correlated. This paper specifies static and dynamic panel demand models for tourism in Portugal and estimates demand equations using tourist inflow data for the period 1995-2006. We find that bilateral trade, immigration, border, and geographical distance between Portugal and countries of origin are the main determinants of tourism to Portugal. The dynamic panel data approach indicates that trade, population, and income are more important determinants than relative price.

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Bibliographic Info

Article provided by Asociatia Generala a Economistilor din Romania - AGER in its journal Theoretical and Applied Economics.

Volume (Year): 3(544) (2010)
Issue (Month): 3(544) (March)
Pages: 63-74

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Handle: RePEc:agr:journl:v:3(544):y:2010:i:3(544):p:63-74

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Related research

Keywords: trade; tourism demand; panel data; tourism forecasting; qualitative methods; Portugal.;

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Cited by:
  1. Camelia Surugiu & Marius-Razvan Surugiu, 2011. "Causality Between Tourism Exports And Trade Openness: Empirical Analysis For Romanian Tourism," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(17), pages 100-109, November.
  2. Martinho, Vítor João Pereira Domingues, 2013. "Spatial analysis of the tourism supply, in Portugal, at NUTs III level," EconStor Preprints 71762, ZBW - German National Library of Economics.

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