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The economic growth impact of tourism in Small Island Developing States—evidence from the Caribbean

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  • Colin Cannonier

    (Belmont University, USA)

  • Monica Galloway Burke

    (Western Kentucky University, USA)

Abstract

Tourism’s contribution to economic output in the Caribbean exceeds that in other regions of the world. We use panel data over the period of three decades, focusing exclusively on Caribbean islands, to study the causal link between tourism and economic growth. The results show that tourism has a positive and statistically significant effect on real Gross Domestic Product growth. A 10% increase in tourism spending is found to increase economic growth from 0.3% to 1%, a finding that is consistent with similar studies. A simple back-of-the-envelope calculation suggests that the overall tourism multiplier is around 0.25 which is smaller than estimates from previous studies. These results have important implications for researchers, industry practitioners, and policymakers.

Suggested Citation

  • Colin Cannonier & Monica Galloway Burke, 2019. "The economic growth impact of tourism in Small Island Developing States—evidence from the Caribbean," Tourism Economics, , vol. 25(1), pages 85-108, February.
    • Handle: RePEc:sae:toueco:v:25:y:2019:i:1:p:85-108
    DOI: 10.1177/1354816618792792
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    Cited by:

    1. Jean-François Hoarau, 2020. "Is international tourism responsible for the pandemic of COVID-19? A preliminary cross-country analysis with a special focus on small islands," TEPP Working Paper 2020-04, TEPP.
    2. José Alberto Fuinhas & Matheus Belucio & Daniela Castilho & Joana Mateus & Rafaela Caetano, 2020. "Tourism and Economic Growth Nexus in Latin America and Caribbean Countries: Evidence from an Autoregressive Distributed Lag Panel," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 13(1), pages 21-34.
    3. Chunbo Zhou & Marios Sotiriadis, 2021. "Exploring and Evaluating the Impact of ICTs on Culture and Tourism Industries’ Convergence: Evidence from China," Sustainability, MDPI, vol. 13(21), pages 1-18, October.
    4. Anca Băndoi & Elena Jianu & Maria Enescu & Gheorghe Axinte & Sorin Tudor & Daniela Firoiu, 2020. "The Relationship between Development of Tourism, Quality of Life and Sustainable Performance in EU Countries," Sustainability, MDPI, vol. 12(4), pages 1-24, February.
    5. Umit Bulut & Emrah Kocak & Courtney Suess, 2020. "The effect of freedom on international tourism demand: Empirical evidence from the top eight most visited countries," Tourism Economics, , vol. 26(8), pages 1358-1373, December.
    6. Setareh Shirkhani & Sami Fethi & Andrew Adewale Alola, 2021. "Tourism-Related Loans as a Driver of a Small Island Economy: A Case of Northern Cyprus," Sustainability, MDPI, vol. 13(17), pages 1-17, August.
    7. Rossana Santos & Rui Alexandre Castanho & Sérgio Lousada, 2019. "Return Migration and Tourism Sustainability in Portugal: Extracting Opportunities for Sustainable Common Planning in Southern Europe," Sustainability, MDPI, vol. 11(22), pages 1-21, November.
    8. Jean-François Hoarau, 2020. "Is international tourism responsible for the pandemic of COVID-19? A very preliminary assessment with a special focus on small islands," Economics Bulletin, AccessEcon, vol. 40(3), pages 2395-2407.
    9. Xueying Huang & Yuanjun Han & Xuhong Gong & Xiangyan Liu, 2020. "Does the belt and road initiative stimulate China’s inbound tourist market? An empirical study using the gravity model with a DID method," Tourism Economics, , vol. 26(2), pages 299-323, March.

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