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Prospects and Limits of Tourism-Led Growth: The International Evidence


  • Adamos Adamou

    (University of Cyprus)

  • Sofronis Clerides

    (University of Cyprus, CEPR and RCEA)


We investigate the relationship between tourism specialization and economic growth. We deviate from previous studies - which have reported mixed evidence - by allowing the relationship to take a nonlinear form. We find that tourism specialization is associated with higher rates of economic growth at relatively low levels of specialization but eventually diminishing returns set in and tourism's contribution becomes minimal. The policy lesson is that there is promise for tourism-led growth in developing countries but other economic activities must also be developed in order to carry the economy forward once the potential of tourism-led growth has been exhausted.

Suggested Citation

  • Adamos Adamou & Sofronis Clerides, 2010. "Prospects and Limits of Tourism-Led Growth: The International Evidence," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 2(3), pages 287-303, September.
  • Handle: RePEc:ren:journl:v:2:y:2010:i:3:p:287-303

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    References listed on IDEAS

    1. Juan Luis Eugenio-Martín & Noelia Martín Morales & Riccardo Scarpa, 2004. "Tourism and Economic Growth in Latin American Countries: A Panel Data Approach," Working Papers 2004.26, Fondazione Eni Enrico Mattei.
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    Cited by:

    1. Juan Gabriel Brida & Bibiana Lanzilotta & Fiorella Pizzolon, 2016. "Dynamic relationship between tourism and economic growth in MERCOSUR countries: a nonlinear approach based on asymmetric time series models," Economics Bulletin, AccessEcon, vol. 36(2), pages 879-894.
    2. Chia-Lin Chang & Thanchanok Khamkaew & Michael McAleer, 2010. "IV Estimation of a Panel Threshold Model of Tourism Specialization and Economic Development," KIER Working Papers 708, Kyoto University, Institute of Economic Research.
    3. Jorge Ridderstaat & Robertico Croes & Peter Nijkamp, 2013. "Modelling Tourism Development and Long-run Economic Growth in Aruba," Tinbergen Institute Discussion Papers 13-145/VIII, Tinbergen Institute.
    4. Iza Lejárraga & Peter Walkenhorst, 2013. "Economic policy, tourism trade and productive diversification," International Economics, CEPII research center, issue 135-136, pages 1-12.
    5. Buthaina M. A. Muhtaseb & Hussam-Eldin Daoud, 2017. "Tourism and Economic Growth in Jordan: Evidence from Linear and Nonlinear Frameworks," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 214-223.
    6. Vincent GERONIMI & Natalia ZUGRAVU-SOILITA & Christine LE GARGASSON & Jessy TSANG KING SANG, 2015. "Le Tourisme Comme Facteur De Vulnérabilités ? Le Rôle Des Patrimoines Insulaires," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 42, pages 189-214.
    7. repec:eee:anture:v:64:y:2017:i:c:p:24-36 is not listed on IDEAS
    8. Claire GOAVEC & Jean-François HOARAU, 2015. "Vulnérabilité Économique Structurelle Et Dépendance Touristique : Quels Enseignements Pour Les Petites Économies Insulaires En Développement," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 42, pages 157-188.
    9. Natalia Zugravu-Soilita & Vincent Geronimi & Christine Le Gargasson & Jessy Tsang King Sang, 2017. "Towards a less vulnerable and more sustainable development: heritage tourism in island economies," Working Papers 2017.11, FAERE - French Association of Environmental and Resource Economists.
    10. repec:agr:journl:v:xxiv:y:2017:i:2(611):p:75-98 is not listed on IDEAS
    11. 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.
    12. Blanka Šimundić & Zvonimir Kuliš & Neven Šerić, 2016. "Tourism and economic growth: an evidence for Latin American and Carribean countries," Tourism and Hospitality Industry 34, University of Rijeka, Faculty of Tourism and Hospitality Management.
    13. Theologos Dergiades & Eleni Mavragani & Bing Pan, 2017. "Arrivals of Tourists in Cyprus: Mind the Web Search Intensity," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 107, Hellenic Observatory, LSE.
    14. repec:eee:touman:v:65:y:2018:i:c:p:212-223 is not listed on IDEAS
    15. repec:eee:touman:v:53:y:2016:i:c:p:207-214 is not listed on IDEAS

    More about this item


    Forecasting; agricultural economics;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries


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