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The euro effect: Tourism creation, tourism diversion and tourism potential within the European Union


  • María Santana-Gallego
  • Francisco Ledesma-Rodríguez
  • Jorge Pérez-Rodríguez


This paper investigates the impact of the Economic and Monetary Union on international tourism flows across a set of 37 developed countries. To do this, an augmented gravity model is estimated using a sample of 31 European countries plus six non-European OECD countries over the period 1995–2012. Results suggest a substantial impact of the euro on intra-Eurozone tourism of between 44 and 126% when proper estimation method, control group and definition of the Eurozone are used. Moreover, evidence of tourism creation is also found. Finally, the potential tourism gains for new members and possible entrants of adopting the euro are explored. This study provides a detailed analysis on the effect of the euro on tourism flows which might be of interest for policymakers of the Eurozone or future member states.

Suggested Citation

  • María Santana-Gallego & Francisco Ledesma-Rodríguez & Jorge Pérez-Rodríguez, 2016. "The euro effect: Tourism creation, tourism diversion and tourism potential within the European Union," European Union Politics, , vol. 17(1), pages 46-68, March.
  • Handle: RePEc:sae:eeupol:v:17:y:2016:i:1:p:46-68

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    Cited by:

    1. Georges Harb, 2019. "The impact of terrorism on inbound tourism: disentangling the cross-spatial correlation," Economics Bulletin, AccessEcon, vol. 39(1), pages 686-700.
    2. Georges Harb & Charbel Bassil, 2020. "Terrorism and inbound tourism: Does immigration have a moderating effect?," Tourism Economics, , vol. 26(3), pages 500-518, May.
    3. Santana-Gallego, Maria & Pérez-Rodríguez, Jorge V., 2019. "International trade, exchange rate regimes, and financial crises," The North American Journal of Economics and Finance, Elsevier, vol. 47(C), pages 85-95.
    4. William Addessi & Bianca Biagi & Maria Giovanna Brandano, 2019. "Evaluating the effect of the introduction of the euro on tourist flows: A synthetic control approach," The World Economy, Wiley Blackwell, vol. 42(5), pages 1554-1575, May.


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