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The sources of comparative advantage in tourism

Author

Listed:
  • Leon du Toit

    () (Bureau for Economic Research, University of Stellenbosch)

  • Johan Fourie

    () (Department of Economics, University of Stellenbosch)

  • Devon Trew

    () (Department of Economics, University of Stellenbosch)

Abstract

Tourism flows are usually explained through demand-side factors such as income growth in developed economies and changes in the preferences of visitors. While these models are adequate for short-term forecasts, little theoretical justification is provided to explain why certain countries perform better than others. This paper identifies which countries have a comparative advantage in the export of travel services (tourism). Consequently, the paper seeks to identify the sources of this comparative advantage. We include the standard explanatory variables (factors of production, including natural environment) for Ricardian comparative advantage, plus measures of infrastructure, health, safety and security, tourism prioritization, and various dummy variables. We also develop and test new variables, including a neighbourhood variable, which measures the benefits obtained from regional tourism clusters. Our results have important policy implications; it is clear that the natural environment has a large positive and significant impact on a country’s revealed comparative advantage, as do transport endowments (a measure of relative accessibility) and the neighbourhood variable. These findings correspond to the predictions of the neoclassical trade theories (namely Heckscher-Ohlin) and to some extent the new trade theories (Krugman).

Suggested Citation

  • Leon du Toit & Johan Fourie & Devon Trew, 2010. "The sources of comparative advantage in tourism," Working Papers 01/2010, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers100
    as

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    File URL: https://www.ekon.sun.ac.za/wpapers/2010/wp012010/wp-01-2010.pdf
    File Function: First version, 2010
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    Citations

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    Cited by:

    1. Nowak, Jean-Jacques & Petit, Sylvain & Sahli, Mondher, 2013. "Intra-Tourism Trade in Europe," MPRA Paper 62236, University Library of Munich, Germany.
    2. repec:col:000385:015960 is not listed on IDEAS
    3. Sharon Hadad & Yossi Hadad & Miki Malul & Mosi Rosenboim, 2012. "Measuring and ranking structural economic efficiency: exploring the case of Spain compared to Germany," World Review of Entrepreneurship, Management and Sustainable Development, Inderscience Enterprises Ltd, vol. 8(1), pages 13-22.

    More about this item

    Keywords

    tourism; comparative advantage; trade in services;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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