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Travel and communication and international differences in GDP per capita

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  • Edward Anderson

    (Overseas Development Institute, London, UK)

Abstract

Economic theory predicts that wage and income levels will be higher in those developing countries to which business travel and telecommunication from developed countries is cheaper and easier. Cross-country regression analysis, using data from the World Tourism Organisation and the method of two-stage least squares, supports this prediction. Levels of per capita GDP are higher in those developing countries which receive higher inflows of business travel from other countries, even when controlling for other influences on per capita GDP with which those inflows are correlated. There is also evidence that governments in developing countries can attract higher inflows of business travel from developed countries by investing in travel and communications infrastructure. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jid.1342
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 19 (2007)
Issue (Month): 3 ()
Pages: 315-332

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Handle: RePEc:wly:jintdv:v:19:y:2007:i:3:p:315-332

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Web page: http://www3.interscience.wiley.com/journal/5102/home

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  1. Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
  2. R. Milbourne & G. Otto & G. Voss, 2003. "Public investment and economic growth," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 527-540.
  3. World Bank, 2004. "World Development Indicators 2004," World Bank Publications, The World Bank, number 13890, October.
  4. Gaspar, Jess & Glaeser, Edward L., 1998. "Information Technology and the Future of Cities," Journal of Urban Economics, Elsevier, vol. 43(1), pages 136-156, January.
  5. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  6. Adrian Wood, 2002. "Globalization and wage inequalities: A synthesis of three theories," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(1), pages 54-82, March.
  7. Easterly, William & Rebelo, Sérgio, 1994. "Fiscal Policy and Economic Growth: An Empirical Investigation," CEPR Discussion Papers 885, C.E.P.R. Discussion Papers.
  8. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
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Cited by:
  1. Robert Lawson & Jayme Lemke, 2012. "Travel visas," Public Choice, Springer, vol. 153(1), pages 17-36, October.
  2. Dowrick, Steve & Tani, Massimiliano, 2011. "International business visits and the technology frontier," Economics Letters, Elsevier, vol. 110(3), pages 209-212, March.

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