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How fast are tourism countries growing? The cross country evidence

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  • R. Brau

    ()

  • A. Lanza

    ()

  • F. Pigliaru

    ()

Abstract

Specializing in tourism is an option available to a number of less developed countries and regions. But is it a good option? To answer this question, we have compared the relative growth performance of 14 “tourism countries” within a sample of 143 countries, observed during the period 1980-95. Using standard OLS cross-country growth regressions, we have documented that the tourism countries grow significantly faster than all the other sub-groups considered in our analysis (OECD, Oil, LDC, Small). Moreover, we have shown that the reason why they are growing faster is neither that they are poorer than the average; nor that they have particularly high saving/investment propensities; nor that they are very open to trade. In other words, the positive performance of the tourism countries is not significantly accounted for by the traditional growth factors of the Mankiw, Romer and Weil type of models. Tourism specialization appears to be an independent determinant. A corollary of our findings is that the role played by the tourism sector should not be ignored by the debate about whether smallness is harmful for growth (e.g. Easterly and Kraay (2000), who conclude that there is no growth disadvantage in smallness). Half of the thirty countries classified as microstates in this literature are heavily dependent on tourism. Once this distinction is adopted, it is easy to see that the small tourism countries perform much better than the remaining small countries. In our findings, smallness per se can be bad for growth, while the opposite is true when smallness goes together with a specialization in tourism.

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Bibliographic Info

Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200309.

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Date of creation: 2003
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Handle: RePEc:cns:cnscwp:200309

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  1. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(2), pages 407-37, May.
  2. Marina Murat & Francesco Pigliaru, 1998. "International trade and uneven growth: a model with intersectoral spillovers of knowledge," The Journal of International Trade & Economic Development, Taylor & Francis Journals, Taylor & Francis Journals, vol. 7(2), pages 221-236.
  3. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, Elsevier, vol. 22(1), pages 3-42, July.
  4. Copeland, Brian R, 1991. "Tourism, Welfare and De-industrialization in a Small Open Economy," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 58(232), pages 515-29, November.
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Cited by:
  1. Fabio Cerina, 2006. "Tourism Specialization and Sustainability: A Long-Run Policy Analysis," Working Papers, Fondazione Eni Enrico Mattei 2006.11, Fondazione Eni Enrico Mattei.
  2. Luca Brandi, 2004. "The Economy of Small States," Rivista di Politica Economica, SIPI Spa, SIPI Spa, vol. 94(6), pages 145-173, November-.
  3. Cellini, Roberto & Torrisi, Gianpiero, 2009. "The regional public spending for tourism in Italy: an empirical analysis," MPRA Paper 16917, University Library of Munich, Germany.
  4. Theodore Panagiotidis & Thomas Panagiotou & Maurizio Mussoni, 2012. "Tourism Led Growth: Evidence from Panel Cointegration Tests," Working Paper Series, The Rimini Centre for Economic Analysis 74_12, The Rimini Centre for Economic Analysis.
  5. Andreas Freytag & Christoph Vietze, 2010. "Can nature promote development? The role of sustainable tourism for economic growth," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2010-008, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  6. Ruben van Loon & Tom Gosens & Jan Rouwendal, 2014. "Cultural Heritage and the Attractiveness of Cities: Evidence from Recreation Trips," Tinbergen Institute Discussion Papers, Tinbergen Institute 14-049/VIII, Tinbergen Institute.
  7. Vincent Linderhof & Stijn Reinhard, 2012. "Do rural development program measures for the encouragement of rural tourism work? A spatial econometric analysis," ERSA conference papers ersa12p932, European Regional Science Association.

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