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An Endogenous Growth Model of International Tourism

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  • Isabel P. A lbaladejo Pina
  • María Pilar Martínez-García

Abstract

This paper investigates the relationship between tourism and economic growth in a dynamic model of international trade. Tourism is viewed as a twofold channel for promoting long-term growth. It finances the imports of foreign capital, but also allows non-traded goods to be consumed by tourists. The authors study both channels jointly in a decentralized two-production sector model, in which four different economic agents interact in a dynamic setting: tourists; domestic consumers; competitive firms in the tourism sector; and firms in the non-traded goods sector. The result is an endogenous growth model in which tourism is the growth engine and balanced growth is assured thanks to the quality of tourist services being kept constant. Although tourists' preferences do not affect the long-run growth of the economy, they can determine the sectoral composition of the economy receiving the tourists.

Suggested Citation

  • Isabel P. A lbaladejo Pina & María Pilar Martínez-García, 2013. "An Endogenous Growth Model of International Tourism," Tourism Economics, , vol. 19(3), pages 509-529, June.
    • Handle: RePEc:sae:toueco:v:19:y:2013:i:3:p:509-529
    DOI: 10.5367/te.2013.0212
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    References listed on IDEAS

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    1. Chi‐Chur Chao & Bharat R. Hazari & Jean‐Pierre Laffargue & Pasquale M. Sgro & Eden S. H. Yu, 2006. "Tourism, Dutch Disease And Welfare In An Open Dynamic Economy," The Japanese Economic Review, Japanese Economic Association, vol. 57(4), pages 501-515, December.
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    4. Ito, Takatoshi & Krueger, Anne O. (ed.), 1995. "Growth Theories in Light of the East Asian Experience," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226386706, December.
    5. Takatoshi Ito & Anne O. Krueger, 1995. "Growth Theories in Light of the East Asian Experience," NBER Books, National Bureau of Economic Research, Inc, number ito_95-2, March.
    6. Schubert, Stefan Franz & Brida, Juan Gabriel & Risso, Wiston Adrián, 2011. "The impacts of international tourism demand on economic growth of small economies dependent on tourism," Tourism Management, Elsevier, vol. 32(2), pages 377-385.
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    Cited by:

    1. Roberto Balado-Naves & David Boto-García & José Francisco Baños-Pino, 2024. "A multisector growth model for testing the Tourism-Led Growth versus the Beach Disease hypotheses," Efficiency Series Papers 2024/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).

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