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How Fast are the Tourism Countries Growing? The cross-country evidence

Author

Listed:
  • Rinaldo Brau

    (Università di Cagliari and CRENoS)

  • Alessandro Lanza

    (Fondazione Eni Enrico Mattei and CRENoS)

  • Francesco Pigliaru

    (Università di Cagliari and CRENoS)

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

  • Rinaldo Brau & Alessandro Lanza & Francesco Pigliaru, 2003. "How Fast are the Tourism Countries Growing? The cross-country evidence," Working Papers 2003.85, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2003.85
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    References listed on IDEAS

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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, vol. 2(1), pages 16-44, March.
    2. Gawande, Kishore & Maloney, William & Montes-Rojas, Gabriel, 2009. "Foreign informational lobbying can enhance tourism: Evidence from the Caribbean," Journal of Development Economics, Elsevier, vol. 90(2), pages 267-275, November.
    3. Elena Bellini & Ugo Gasparino & Barbara Del Corpo & William Malizia, 2007. "Impact of Cultural Tourism upon Urban Economies: An Econometric Exercise," Working Papers 2007.85, Fondazione Eni Enrico Mattei.
    4. Aliv Banerjee Author_Email: & Nilanjan Ray & Sukanya Gosh, 2011. "Issues And Challenges Of Tourism Development In West Bengal, India," International Conference on Management (ICM 2011) Proceeding 2011-053-157, Conference Master Resources.
    5. Ogunleye, Eric Kehinde, 2011. "Emerging Evidence on the Relative Importance of Sectoral Sources of Growth in Sub-Saharan Africa," WIDER Working Paper Series 061, World Institute for Development Economic Research (UNU-WIDER).
    6. Jorge Ridderstaat & Robertico Croes & Peter Nijkamp, 2013. "Modelling Tourism Development and Long-run Economic Growth in Aruba," Tinbergen Institute Discussion Papers 13-145/VIII, Tinbergen Institute.
    7. Cellini, Roberto & Torrisi, Gianpiero, 2009. "The regional public spending for tourism in Italy: an empirical analysis," MPRA Paper 16917, University Library of Munich, Germany.
    8. repec:cmj:journl:y:2013:i:29:popescu is not listed on IDEAS
    9. Cristina Santos & Alexandre Almeida & Aurora A.C. Teixeira, 2008. "Searching for clusters in tourism. A quantitative methodological proposal," FEP Working Papers 293, Universidade do Porto, Faculdade de Economia do Porto.
    10. 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, vol. 38(3), pages 253-285, August.
    11. Laura-Maria POPESCU & Ileana NISULESCU, 2013. "Tourism in time of crisis and influence in the process of increase economic. Comparative analysis Romania-Bulgaria-Greece," SEA - Practical Application of Science, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 2, pages 251-259, October.
    12. Juin‐Jen Chang & Lee‐Jung Lu & Shih‐Wen Hu, 2011. "Congestion Externalities of Tourism, Dutch Disease and Optimal Taxation: Macroeconomic Implications," The Economic Record, The Economic Society of Australia, vol. 87(276), pages 90-108, March.
    13. Claire GOAVEC & Jean-François HOARAU, 2015. "Vulnérabilité Économique Structurelle Et Dépendance Touristique : Quels Enseignements Pour Les Petites Économies Insulaires En Développement," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 42, pages 157-188.
    14. 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.
    15. Luca Brandi, 2004. "The Economy of Small States," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 145-173, November-.
    16. Bichaka Fayissa & Christian Nsiah & Badassa Tadasse, 2009. "Tourism and Economic Growth in Latin American Countries(LAC): Further Empirical Evidence," Working Papers 200902, Middle Tennessee State University, Department of Economics and Finance.
    17. Andreas Freytag & Christoph Vietze, 2006. "International Tourism, development and Biodiversity: First Evidence," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 11/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    18. Tiago Neves Sequeira & Paulo Macas Nunes, 2008. "Does tourism influence economic growth? A dynamic panel data approach," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2431-2441.
    19. Jorge Ridderstaat & Robertico Croes, 2013. "The Force Field of Tourism," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 5(1), pages 1-24, June.
    20. Nasir Muhammad Ali & Wu Junjie & Guerrero José Calderón, 2015. "Economic Growth, Exchange Rate and Constrained Competiveness of the Tourism Sector in Andalucía," International Journal of Management and Economics, De Gruyter Open, vol. 48(1), pages 84-100, December.
    21. Benzarour, Choukri & satour, rachid, 2016. "السياحة والنمو الاقتصادي في الجزائر : الأدلة من التكامل المشترك و تحليل السببية
      [Tourism and economic growth in Algeria: Evidence of Cointegration and causal analysis]
      ," MPRA Paper 78731, University Library of Munich, Germany.
    22. OA Carboni & G. Medda, 2007. "Government Size and the Composition of Public Spending in a Neoclassical Growth Model," Working Paper CRENoS 200701, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    23. 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.

    More about this item

    Keywords

    Economic growth; Convergence; Tourism specialization; Sustainable development;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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