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How fast are tourism countries growing? The cross country evidence

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  • R. Brau

    ()

  • A. Lanza

    ()

  • F. Pigliaru

    ()

Abstract

Specializing in tourism is an option available to a number of less developed countries and regions. But is it a good option? To answer this question, we have compared the relative growth performance of 14 "tourism countries" within a sample of 143 countries, observed during the period 1980-95. Using standard OLS cross-country growth regressions, we have documented that the tourism countries grow significantly faster than all the other sub-groups considered in our analysis (OECD, Oil, LDC, Small). Moreover, we have shown that the reason why they are growing faster is neither that they are poorer than the average; nor that they have particularly high saving/investment propensities; nor that they are very open to trade. In other words, the positive performance of the tourism countries is not significantly accounted for by the traditional growth factors of the Mankiw, Romer and Weil type of models. Tourism specialization appears to be an independent determinant. A corollary of our findings is that the role played by the tourism sector should not be ignored by the debate about whether smallness is harmful for growth (e.g. Easterly and Kraay (2000), who conclude that there is no growth disadvantage in smallness). Half of the thirty countries classified as microstates in this literature are heavily dependent on tourism. Once this distinction is adopted, it is easy to see that the small tourism countries perform much better than the remaining small countries. In our findings, smallness per se can be bad for growth, while the opposite is true when smallness goes together with a specialization in tourism.

Suggested Citation

  • R. Brau & A. Lanza & F. Pigliaru, 2003. "How fast are tourism countries growing? The cross country evidence," Working Paper CRENoS 200309, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:200309
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    References listed on IDEAS

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    1. Copeland, Brian R, 1991. "Tourism, Welfare and De-industrialization in a Small Open Economy," Economica, London School of Economics and Political Science, vol. 58(232), pages 515-529, November.
    2. Gene M. Grossman (ed.), 1996. "Economic Growth," Books, Edward Elgar Publishing, volume 0, number 553, September.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    4. Marina Murat & Francesco Pigliaru, 1998. "International trade and uneven growth: a model with intersectoral spillovers of knowledge," The Journal of International Trade & Economic Development, Taylor & Francis Journals, pages 221-236.
    5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Andreas Freytag & Christoph Vietze, 2013. "Can nature promote development? The role of sustainable tourism for economic growth," Journal of Environmental Economics and Policy, Taylor & Francis Journals, pages 16-44.
    2. Cellini, Roberto & Torrisi, Gianpiero, 2009. "The regional public spending for tourism in Italy: an empirical analysis," MPRA Paper 16917, University Library of Munich, Germany.
    3. Fabio Cerina, 2006. "Tourism Specialization and Sustainability: A Long-Run Policy Analysis," Working Papers 2006.11, Fondazione Eni Enrico Mattei.
    4. Ruben van Loon & Tom Gosens & Jan Rouwendal, 2014. "Cultural Heritage and the Attractiveness of Cities: Evidence from Recreation Trips," Tinbergen Institute Discussion Papers 14-049/VIII, Tinbergen Institute.
    5. Andreas Freytag & Christoph Vietze, 2010. "Can nature promote development? The role of sustainable tourism for economic growth," Jena Economic Research Papers 2010-008, Friedrich-Schiller-University Jena.
    6. repec:eee:anture:v:64:y:2017:i:c:p:24-36 is not listed on IDEAS
    7. Onofri, Laura & Nunes, Paulo A.L.D., 2013. "Beach ‘lovers’ and ‘greens’: A worldwide empirical analysis of coastal tourism," Ecological Economics, Elsevier, vol. 88(C), pages 49-56.
    8. Ana-Maria NICA, 2015. "Raising Tourism Competitiveness - Are Clusters The Sustainable Solution?," Proceedings of International Academic Conferences 2503894, International Institute of Social and Economic Sciences.
    9. Valérie ANGEON & Samuel BATES, 2015. "L'Agriculture, Facteur De Vulnérabilité Des Petites Économies Insulaires ?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 42, pages 105-131.
    10. Luca Brandi, 2004. "The Economy of Small States," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 145-173, November-.
    11. Theodore Panagiotidis & Thomas Panagiotou & Maurizio Mussoni, 2012. "Tourism Led Growth: Evidence from Panel Cointegration Tests," Working Paper series 74_12, Rimini Centre for Economic Analysis.
    12. Vincent Linderhof & Stijn Reinhard, 2012. "Do rural development program measures for the encouragement of rural tourism work? A spatial econometric analysis," ERSA conference papers ersa12p932, European Regional Science Association.
    13. Ruben Loon & Tom Gosens & Jan Rouwendal, 2014. "Cultural heritage and the attractiveness of cities: evidence from recreation trips," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, pages 253-285.
    14. Elçin Aykac Alp & Elif Guneren Genc, 2015. "The Relation between Current Account Deficit and Tourism: The Case of Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 448-453.

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