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Economic Policy, Tourism Trade and Productive Diversification

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  • Iza Lejárraga
  • Peter Walkenhorst

Abstract

Over the past two decades, tourism exports have been a major driver of economic growth in many emerging and developing countries. Yet, increased tourism revenues do not automatically translate into structural transformation and broad-based economic development. Drawing on cross-sectional data, this paper gauges the extent to which tourism has contributed to economic diversification in a large sample of developing countries. An econometric model is used to assess the relative importance of a country’s natural endowments, level of development, institutional maturity, business environment, and trade regulations in explaining cross-country differences in linkages between tourism and the general economy. The central findings contain encouraging lessons for developing countries: domains that are more amenable to policy interventions in the short term, such as the business environment or trade regulations, matter most in fostering productive linkages between tourism and the general economy. In contrast, fixed factors, such as land availability, or longer-terms goals, such as advances in the level of development, have less influence.

Suggested Citation

  • Iza Lejárraga & Peter Walkenhorst, 2013. "Economic Policy, Tourism Trade and Productive Diversification," Working Papers 2013-07, CEPII research center.
  • Handle: RePEc:cii:cepidt:2013-07
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    Cited by:

    1. Deng, Taotao & Hu, Yukun & Ma, Mulan, 2019. "Regional policy and tourism: A quasi-natural experiment," Annals of Tourism Research, Elsevier, vol. 74(C), pages 1-16.
    2. Burak Darici & Ahmet Aydin & Fatih Ayhan & Merve Altaylar, 2023. "Macroeconomic Determinants of Tourism Demand Toward Emerging Markets," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 73(73-2), pages 837-864, December.
    3. Jose Guilherme Reis & Gonzalo Varela, 2015. "Travel Channel Meets Discovery Channel or How Tourism Can Encourage Better Export Performance and Diversification in Nepal," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 16(2), pages 183-208, September.
    4. Sardaro, Ruggiero & La Sala, Piermichele & De Pascale, Gianluigi & Faccilongo, Nicola, 2021. "The conservation of cultural heritage in rural areas: Stakeholder preferences regarding historical rural buildings in Apulia, southern Italy," Land Use Policy, Elsevier, vol. 109(C).
    5. Mann, Stefan & Stefan, Petrica, 2018. "Wine Farms between Specialisation and Diversification – Empirical Insights from Switzerland and Romania," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 67(3), September.
    6. Reis, José Guilherme & Varela, Gonzalo, 2013. "Can Tourism Encourage Better Export Performance and Diversification in Nepal?," World Bank - Economic Premise, The World Bank, issue 127, pages 1-6, October.

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    More about this item

    Keywords

    Tourism linkages; economic development; business enviroment;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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