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How fast are the tourism countries growing? The international evidence, 1980-95

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  • Francesco Pigliaru

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  • Alessandro Lanza

    ()

Abstract

International data on per-capita income show that, in the last few years, growth in some countries specialized in tourism was faster than in the average country included in the World Bank-World Development Indicators. Fast growth in tourism countries might be due to fast, unsustainable exploitation of a given endowment of natural resources, or to a more robust and sustainable phenomenon (due for instance to the existence of a favourable trend in the terms of trade between tourism and other activities). To date, little analytical or empirical studies are available to explain such a performance and the underlying mechanisms. This is unfortunate. For instance, a better understanding of the above issues is crucial to assess the role tourism can play in less developed countries and regions. The main objective of our paper is to fill this gap in the current literature. We address the following questions: (i) What are the economic mechanisms capable to generate fast growth in tourism countries? (ii) How empirically robust is the positive relationship between faster growth and tourism specialization? (iii) Is the growth path associated to tourism specialization sustainable? We use a two-sector endogenous growth model to address question (i). In particular, we define the conditions required for small countries to specialise in tourism and to enter the faster growth path. Our suggestion is that what matters is, first, a country’s relative endowment of the natural resource, and, second, a low elasticity of substitution between tourism services and other consumption goods, so that the terms of trade move fast enough in favour of the tourism countries. Question (ii) is addressed by means of standard cross-section and panel growth regressions aimed at testing whether specialisation in tourism is robustly associated with faster than average per capita growth in international dataset over the last twenty years. Preliminary results indicate that such relationship might be robust indeed for the sample period. Question (iii) will be dealt with using the same international dataset. First, by examining their comparative performance in several sub-periods, we will assess whether tourism countries are characterized by a more pronounced than average slow-down in growth. Second, we will try to assess to what extent growth in tourism countries is due to a favourable terms-of-trade effect rather than fast expansion of the industry (which imply faster exploitation of the natural resource).

Suggested Citation

  • Francesco Pigliaru & Alessandro Lanza, 2003. "How fast are the tourism countries growing? The international evidence, 1980-95," ERSA conference papers ersa03p234, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa03p234
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa03/cdrom/papers/234.pdf
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    References listed on IDEAS

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    1. Gene M. Grossman (ed.), 1996. "Economic Growth," Books, Edward Elgar Publishing, volume 0, number 553.
    2. Gylfason, Thorvaldur & Herbertsson, Tryggvi Thor & Zoega, Gylfi, 1997. "A Mixed Blessing: Natural Resources and Economic Growth," CEPR Discussion Papers 1668, C.E.P.R. Discussion Papers.
    3. M. Thea Sinclair, 1998. "Tourism and economic development: A survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(5), pages 1-51.
    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, vol. 7(2), 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. Chia-Lin Chang & Thanchanok Khamkaew & Michael McAleer, 2010. "IV Estimation of a Panel Threshold Model of Tourism Specialization and Economic Development," KIER Working Papers 708, Kyoto University, Institute of Economic Research.
    2. 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.
    3. 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.
    4. 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.
    5. repec:eee:anture:v:64:y:2017:i:c:p:24-36 is not listed on IDEAS
    6. 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.

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