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How Fast are the Tourism Countries Growing? The cross-country evidence

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  • Rinaldo Brau

    (Università di Cagliari and CRENoS)

  • Alessandro Lanza

    (Fondazione Eni Enrico Mattei and CRENoS)

  • Francesco Pigliaru

    (Università di Cagliari and CRENoS)

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 Fondazione Eni Enrico Mattei in its series Working Papers with number 2003.85.

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Date of creation: Sep 2003
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Handle: RePEc:fem:femwpa:2003.85

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Keywords: Economic growth; Convergence; Tourism specialization; Sustainable development;

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References

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  1. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  2. Copeland, Brian R, 1991. "Tourism, Welfare and De-industrialization in a Small Open Economy," Economica, London School of Economics and Political Science, vol. 58(232), pages 515-29, November.
  3. 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, vol. 7(2), pages 221-236.
  4. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  5. Robert J. Barro & Paul M. Romer, 1991. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr91-1.
    • Robert J. Barro & Paul Romer, 1993. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr93-1.
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Citations

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Cited by:
  1. Laura-Maria POPESCU & Ileana NISULESCU, 2013. "Tourism in time of crisis and influence in the process of increase economic. Comparative analysis Romania-Bulgaria-Greece," CrossCultural Management Journal, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 29, pages 302-310, October.
  2. Bichaka Fayissa & Christian Nsiah & Badassa Tadasse, 2009. "Tourism and Economic Growth in Latin American Countries(LAC): Further Empirical Evidence," Working Papers 200902, Middle Tennessee State University, Department of Economics and Finance.
  3. Andreas Freytag & Christoph Vietze, 2006. "International Tourism, development and Biodiversity: First Evidence," Jenaer Schriften zur Wirtschaftswissenschaft 11/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
  4. Jorge Ridderstaat & Robertico Croes, 2013. "The Force Field of Tourism," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 5(1), pages 1-24, June.
  5. Cellini, Roberto & Torrisi, Gianpiero, 2009. "The regional public spending for tourism in Italy: an empirical analysis," MPRA Paper 16917, University Library of Munich, Germany.
  6. Gawande, Kishore & Maloney, William & Montes Rojas, Gabriel V., 2009. "Foreign informational lobbying can enhance tourism : evidence from the Caribbean," Policy Research Working Paper Series 4834, The World Bank.
  7. Elena Bellini & Ugo Gasparino & Barbara Del Corpo & William Malizia, 2007. "Impact of Cultural Tourism upon Urban Economies: An Econometric Exercise," Working Papers 2007.85, Fondazione Eni Enrico Mattei.
  8. Andreas Freytag & Christoph Vietze, 2010. "Can nature promote development? The role of sustainable tourism for economic growth," Jena Economic Research Papers 2010-008, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  9. O. Carboni & G. Medda, 2007. "Government Size and the Composition of Public Spending in a Neoclassical Growth Model," Working Paper CRENoS 200701, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  10. Luca Brandi, 2004. "The Economy of Small States," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 145-173, November-.
  11. Ogunleye, Eric Kehinde, 2011. "Emerging Evidence on the Relative Importance of Sectoral Sources of Growth in Sub-Saharan Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  12. Aliv Banerjee Author_Email: & Nilanjan Ray & Sukanya Gosh, 2011. "Issues And Challenges Of Tourism Development In West Bengal, India," International Conference on Management (ICM 2011) Proceeding 2011-053-157, Conference Master Resources.
  13. Cristina Santos & Alexandre Almeida & Aurora A.C. Teixeira, 2008. "Searching for clusters in tourism. A quantitative methodological proposal," FEP Working Papers 293, Universidade do Porto, Faculdade de Economia do Porto.

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