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The hidden geography of tourism firm spending: tracking economic leakages with firm-to-firm transactions

Author

Listed:
  • Srhoj, Stjepan
  • Mikulić, Josip

Abstract

Tourism influences local economies through direct, indirect, and induced effects. Using novel firm-to-firm transaction data, we shed light on tourism's indirect effects. We find that tourism firms primarily source inputs locally or from the capital, with limited purchases from distant, poorer regions. While direct imports by tourism firms are relatively small, indirect imports-those embedded in supply chains-are substantial, comprising 54.2% of total supplier costs. Our findings suggest that overlooking indirect imports may lead to an overestimation of tourism's true economic contribution.

Suggested Citation

  • Srhoj, Stjepan & Mikulić, Josip, 2025. "The hidden geography of tourism firm spending: tracking economic leakages with firm-to-firm transactions," GLO Discussion Paper Series 1577, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1577
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    References listed on IDEAS

    as
    1. Emmanuel Dhyne & Ayumu Ken Kikkawa & Magne Mogstad & Felix Tintelnot, 2021. "Trade and Domestic Production Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(2), pages 643-668.
    2. Benjamin Faber & Cecile Gaubert, 2019. "Tourism and Economic Development: Evidence from Mexico's Coastline," American Economic Review, American Economic Association, vol. 109(6), pages 2245-2293, June.
    3. Joaquin Blaum & Claire Lelarge & Michael Peters, 2018. "The Gains from Input Trade with Heterogeneous Importers," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(4), pages 77-127, October.
    4. Pratt, Stephen, 2015. "The economic impact of tourism in SIDS," Annals of Tourism Research, Elsevier, vol. 52(C), pages 148-160.
    5. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    6. AV Krishna Chaitanya & Sampada Kumar Swain, 2024. "Economic leakages in tourism: A comprehensive review of theoretical and empirical perspectives," Tourism Economics, , vol. 30(5), pages 1306-1323, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    firm-to-firm transaction data; economic leakages; supplier spending; indirect imports; local economic impact;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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