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The Role of Inbound Tourist Flows in Promoting Exports

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  • Zouheir El-Sahli

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

While it is established that tourism benefits growth through increased employment and investments, it is not well understood whether tourism has an effect on exports. This paper explores exports as an additional channel through which tourism affects domestic economic activity. Using bilateral tourist and trade flows, I explore the causal effect of tourist flows on exports. To deal with endogeneity, I construct two instruments that I use on two different sets of exporters. The evidence points in the same direction. I find that tourism affects mainly the exports of differentiated products. Specifically, I find that tourism benefits the exports from non-OECD exporters of processed food products and this effect is only estimated for South-North trade with an elasticity close to 1. For European countries, the findings point in the same direction; tourism affects differentiated consumer products and processed food with elasticity close to 1, which adds plausibility to the earlier results. I also find a lagged effect for tourism mainly on the export of consumer goods (for the two samples) and processed food products (for European countries). The results suggest that exports is an additional channel through which tourism can stimulate domestic economic activity in the tourist destination.

Suggested Citation

  • Zouheir El-Sahli, 2017. "The Role of Inbound Tourist Flows in Promoting Exports," Working Papers halshs-01524530, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01524530
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01524530
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    References listed on IDEAS

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    More about this item

    Keywords

    tourism; globalization; trade; gravity; terrorism;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • Z3 - Other Special Topics - - Tourism Economics

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