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Does tourism affect the informal sector?

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  • Lv, Zhike

Abstract

The effect of tourism on economic growth has largely been investigated in the literature. However, it is still poorly understood about how the impact of tourism on the size of the informal economy. The present study attempts to fill the research gaps in this field, and thus applies panel regression techniques to examine the relationship between tourism development and the size of the underground economy across 96 countries over the period 2000–2007. The estimation results show that tourism exhibits a U-shaped relation with informality. Specifically, the share of informal sector first decreases in the early stages of tourism development and then increases as tourism continues. Some policy implications, limitations, and future research directions are also discussed.

Suggested Citation

  • Lv, Zhike, 2020. "Does tourism affect the informal sector?," Annals of Tourism Research, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:anture:v:80:y:2020:i:c:s0160738319301732
    DOI: 10.1016/j.annals.2019.102816
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    Cited by:

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    2. Al Saba, Fatema & Mertzanis, Charilaos & Kampouris, Ilias, 2023. "Employee empowerment and tourism sector employment around the world," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 9(2), pages 28-40.
    3. Aldo Salinas & Cristian Ortiz & Pablo Ponce & Javier Changoluisa, 2023. "Does tourism activity reduce the size of the informal economy? Capturing long-term heterogeneous linkages around the world," Tourism Economics, , vol. 29(2), pages 305-347, March.
    4. Rafael Robina-Ramírez & M. Isabel Sánchez-Hernández & Carlos Díaz-Caro, 2021. "Hotel manager perceptions about corporate compliance in the tourism industry: an empirical regional case study in Spain," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(2), pages 627-654, June.
    5. Salinas, Aldo & Ortiz, Cristian & Changoluisa, Javier & Muffatto, Moreno, 2023. "Testing three views about the determinants of informal economy: New evidence at global level and by country groups using the CS-ARDL approach," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 438-455.
    6. Fabio Mazzola & Pietro Pizzuto & Giovanni Ruggieri, 2022. "Tourism and territorial growth determinants in insular regions: A comparison with mainland regions for some European countries (2008–2019)," Papers in Regional Science, Wiley Blackwell, vol. 101(6), pages 1331-1382, December.
    7. Ting Xu & Zhike Lv, 2023. "The effect of tourism on the shadow economy: The level of economic development is key," Tourism Economics, , vol. 29(8), pages 2129-2142, December.

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