Impacts of innovation, productivity and specialization on tourism competitiveness – a spatial econometric analysis on European regions

Tourism is clearly a place-based activity, while in many advanced economies it is increasingly becoming a knowledge-based activity, with a high potential for the development of practice- and place-based innovation strategies. This study analyses whether and how regional systems of innovation influence the competiveness of tourism destinations in Europe. Impacts of both traditional production factors (physical and human capital), productivity, specialization and other contextual variables – related to the territorial capital of each region – on regional tourism performance of 237 European regions (NUTS 2) are analysed over a period of 8 years, using advanced techniques for spatial econometric analysis. The results reveal lower levels of productivity in those regions where tourism services are more labour intensive, while regions where education, innovation and productivity demonstrate higher levels are those where gross value added in tourism is less important for the regional economy. Policy implications are discussed, taking into consideration the principles for smart specialisation strategies in European regions and the possibility for cross-border regional cooperation. This work also confirms the research potential of spatial econometric analysis – and in particular spatial autocorrelation techniques – for tourism studies.