Does Tourism Contribute to Balanced Regional Development? Evidence from Greece

Tourism constitutes a key pillar of the national economy and/or a growth engine for regional/local economies in many countries. However, there is a question as to whether it ultimately leads to economic convergence or divergence among regions. This paper aims to contribute to the limited literature on this topic by empirically investigating the spatial distributions of both economic and tourism activity in Greece based on regional time series data (2005–2019). Gini coefficients of economic, tourism demand, and tourism supply indicators are calculated and compared. The results indicate that regional tourism disparities are larger than regional economic inequalities. Furthermore, the Gini coefficients of tourism demand and supply indicators display an upward trend, suggesting that tourism activity becomes even more concentrated. This spatial concentration occurs in both wealthier and less prosperous regions, but tourism does not seem to ultimately result in economic convergence, as economically lagging regions perform poorly and even display a downward trend in tourism indicators. The analysis also suggests that domestic tourism is a more effective instrument for balanced regional development than inbound tourism. Tourism policy implications stemming from the results are also discussed.