IDEAS home Printed from https://ideas.repec.org/p/hhs/stavef/2018_003.html
   My bibliography  Save this paper

The Oil Price Collapse and the Birth of a Tourist Nation

Author

Listed:
  • Xie, Jinghua

    (University of Stavanger)

  • Tveterås , Sigbjorn

    (University of Stavanger)

Abstract

In this paper, we have estimated hotel revenue functions at the regional level in Norway. The purpose is to investigate the effects of the oil price collapse on tourism demand. The oil industry is a dominant economic sector in Norway. Its high demand for economic resources has inflated the general price level nationally. A side effect is that the Norwegian tourism industry has struggled with poor price competitiveness. We find the downfall in oil revenues caused by the fall in crude oil prices has boosted tourism growth through a weakening of the local currency, Norwegian kroner. This result suggests that a subset of rich countries where wealth inflate prices of tourism services can have problem in developing its tourism industry.

Suggested Citation

  • Xie, Jinghua & Tveterås , Sigbjorn, 2018. "The Oil Price Collapse and the Birth of a Tourist Nation," UiS Working Papers in Economics and Finance 2018/3, University of Stavanger.
  • Handle: RePEc:hhs:stavef:2018_003
    as

    Download full text from publisher

    File URL: https://www.ba-odegaard.no/uis_wps_econ_fin/uis_wps_2018_03_xie_tveteras.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Domenico Ferraro & Ken Rogoff & Barbara Rossi, 2011. "Can Oil Prices Forecast Exchange Rates?," Working Papers 11-05, Duke University, Department of Economics.
    2. Hilde C. Bjørnland & Leif A. Thorsrud, 2016. "Boom or Gloom? Examining the Dutch Disease in Two‐speed Economies," Economic Journal, Royal Economic Society, vol. 126(598), pages 2219-2256, December.
    3. Torvik, Ragnar, 2001. "Learning by doing and the Dutch disease," European Economic Review, Elsevier, vol. 45(2), pages 285-306, February.
    4. Mr. Alexander Culiuc, 2014. "Determinants of International Tourism," IMF Working Papers 2014/082, International Monetary Fund.
    5. Brons, Martijn & Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2002. "Price elasticities of demand for passenger air travel: a meta-analysis," Journal of Air Transport Management, Elsevier, vol. 8(3), pages 165-175.
    6. Q. Farooq Akram, 2004. "Oil prices and exchange rates: Norwegian evidence," Econometrics Journal, Royal Economic Society, vol. 7(2), pages 476-504, December.
    7. Joppe, Marion, 2012. "Migrant workers: Challenges and opportunities in addressing tourism labour shortages," Tourism Management, Elsevier, vol. 33(3), pages 662-671.
    8. Sophie Masson & Romain Petiot, 2009. "Can the high speed rail reinforce tourism attractiveness ? The case of the hagh speed rail between Perpignan (france) and Barcelona (Spain)," Post-Print hal-03062650, HAL.
    9. Nishaal Gooroochurn & Guntur Sugiyarto, 2005. "Competitiveness Indicators in the Travel and Tourism Industry," Tourism Economics, , vol. 11(1), pages 25-43, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Salisu, Afees A. & Adekunle, Wasiu & Alimi, Wasiu A. & Emmanuel, Zachariah, 2019. "Predicting exchange rate with commodity prices: New evidence from Westerlund and Narayan (2015) estimator with structural breaks and asymmetries," Resources Policy, Elsevier, vol. 62(C), pages 33-56.
    2. Beckmann, Joscha & Czudaj, Robert L. & Arora, Vipin, 2020. "The relationship between oil prices and exchange rates: Revisiting theory and evidence," Energy Economics, Elsevier, vol. 88(C).
    3. Jung, Young Cheol & Das, Anupam & McFarlane, Adian, 2020. "The asymmetric relationship between the oil price and the US-Canada exchange rate," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 198-206.
    4. Bjørnland, Hilde C. & Thorsrud, Leif Anders & Torvik, Ragnar, 2019. "Dutch disease dynamics reconsidered," European Economic Review, Elsevier, vol. 119(C), pages 411-433.
    5. Alberola, Enrique & Benigno, Gianluca, 2017. "Revisiting the commodity curse: A financial perspective," Journal of International Economics, Elsevier, vol. 108(S1), pages 87-106.
    6. Al Jabri, Salwa & Raghavan, Mala & Vespignani, Joaquin, 2022. "Oil prices and fiscal policy in an oil-exporter country: Empirical evidence from Oman," Energy Economics, Elsevier, vol. 111(C).
    7. Beckmann, Joscha & Czudaj, Robert, 2013. "Is there a homogeneous causality pattern between oil prices and currencies of oil importers and exporters?," Energy Economics, Elsevier, vol. 40(C), pages 665-678.
    8. Chang, Kuei-Feng & Lin, Jin-Xu & Lin, Shih-Mo, 2021. "Revisiting the Dutch disease thesis from the perspective of value-added trade," Resources Policy, Elsevier, vol. 72(C).
    9. Sharma, Susan Sunila & Phan, Dinh Hoang Bach & Iyke, Bernard, 2019. "Do oil prices predict Indonesian macroeconomy?," Economic Modelling, Elsevier, vol. 82(C), pages 2-12.
    10. repec:zbw:rwirep:0431 is not listed on IDEAS
    11. Ron Alquist & Reinhard Ellwanger & Jianjian Jin, 2020. "The effect of oil price shocks on asset markets: Evidence from oil inventory news," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 40(8), pages 1212-1230, August.
    12. Becken, Susanne & Carmignani, Fabrizio, 2020. "Are the current expectations for growing air travel demand realistic?," Annals of Tourism Research, Elsevier, vol. 80(C).
    13. Chang, Kuang-Liang, 2014. "The symmetrical and positive relationship between crude oil and nominal exchange rate returns," The North American Journal of Economics and Finance, Elsevier, vol. 29(C), pages 266-284.
    14. Ramírez-Cendrero, Juan M. & Wirth, Eszter, 2016. "Is the Norwegian model exportable to combat Dutch disease?," Resources Policy, Elsevier, vol. 48(C), pages 85-96.
    15. Panopoulou, Ekaterini & Souropanis, Ioannis, 2019. "The role of technical indicators in exchange rate forecasting," Journal of Empirical Finance, Elsevier, vol. 53(C), pages 197-221.
    16. Alssadek, Marwan & Benhin, James, 2021. "Oil boom, exchange rate and sectoral output: An empirical analysis of Dutch disease in oil-rich countries," Resources Policy, Elsevier, vol. 74(C).
    17. Michael B. Devereux & Gregor W. Smith, 2018. "Commodity Currencies and Monetary Policy," NBER Working Papers 25076, National Bureau of Economic Research, Inc.
    18. Davood Pirayesh Neghab & Mucahit Cevik & M. I. M. Wahab, 2023. "Explaining Exchange Rate Forecasts with Macroeconomic Fundamentals Using Interpretive Machine Learning," Papers 2303.16149, arXiv.org.
    19. Parul Bhatia, 2021. "Sustainability Of Exchange Rates And Crude Oil Prices Connection With Covid-19: An Investigation For Brics," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 5, pages 19-29, October.
    20. Hilde C. Bj�rnland & Julia Zhulanova, 2018. "The Shale Oil Boom and the U.S. Economy: Spillovers and Time-Varying Effects," Working Papers No 8/2018, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
    21. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).

    More about this item

    Keywords

    Oil price; tourism; exchange rate; price competitiveness; Norway;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:stavef:2018_003. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bernt Arne Odegaard (email available below). General contact details of provider: https://edirc.repec.org/data/iouisno.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.