How strong is the linkage between tourism and economic growth in Europe?

Abstract

In this study, we examine the dynamic relationship between tourism growth and economic growth, using a newly introduced spillover index approach. Based on monthly data for 10 European countries over the period 1995-2012, our analysis reveals the following empirical regularities. First, the tourism-economic growth relationship is not stable over time in terms of both magnitude and direction, indicating that the tourism-led economic growth (TLEG) and the economic-driven tourism growth (EDTG) hypotheses are time-dependent. Second, the aforementioned relationship is also highly economic event-dependent, as it is influenced by the Great Recession of 2007 and the ongoing Eurozone debt crisis that began in 2010. Finally, the impact of these economic events is more pronounced in Cyprus, Greece, Portugal and Spain, which are the European countries that have witnessed the greatest economic downturn since 2009. Plausible explanations of these results are provided and policy implications are drawn.

Tourism-led growth hypothesis in the top ten tourist destinations: New evidence using the quantile-on-quantile approach

“…This minor role of the German tourism industry is not surprising if we consider that Germany, which is the leading European economy and the second largest exporter worldwide,is basically specialized in non-tourism-related and technologically advanced industriessuch as automobiles, chemicals, electrical equipment and machinery (Antonakakis et al, 2015b).In fact, according to the WTTC Economic Impact Report, in 2014, the direct contribution of tourism to the German economy was 3.8% of the total German GDP. In the case of Germany, the mainexception to the generally poor tourism-economic growth nexus islocated in the area that combines the lowest in the sense that,in general, the US tourism industry is not a key driving factor of the overall US economy, which seems reasonable considering that the US is not a particularly tourism-oriented economy.…”

“…Nevertheless, some recent studies have explored the economic growth-tourism link using increasingly sophisticated time series methodssuch astime-varying models (Antonakakis et al, 2015a;Arslanturk et al, 2011;Balcilar et al, 2014), nonlinear models (Brida et al, 2015;Phiri, 2015;Po and Huang, 2008;Wang, 2012),time-varying copula functions (Pérez-Rodríguez et al, 2015) and a VAR-basedspillover index approach (Antonakakis et al, 2015b).Another importantline of researchhas examined the nexus between economic growth and tourism using panel data techniques for a selected group of countries (Aslan, 2013;Lee and Chang, 2008;Narayan et al, 2010;Sequeira and Nunes, 2008;Tugcu, 2014).The great majority of these panel-data-based studies provide evidence supporting the TLG hypothesis.…”

Greenhouse Gas Emissions of Tourism-Based Leisure Farms in Taiwan

“…Countryside experience type (6) Tourism orchard type (7) Countryside bedand-breakfast type (4) Tourism resort type (14) Fuel/total (%) LPG/total (%) Electricity/total (%) …”

“…However, the carbon footprint embodied in the tourism industry includes infrastructure construction, hotel building construction, catering services, transportation etc., which leads to an underestimation of the tourism sector's environmental responsibility [2][3][4]. There is obvious economic growth for those countries that have endeavored in tourism development [5][6][7][8]. However, it is an undisputable truth that tourism businesses will also produce significant amounts of carbon emissions [9].…”

A small open economic growth model with imported goods, tourism, and terms of trade

“…Tourism has become an important part of many economies (Andereck et al, 2005;MatarritaCascante, 2010;and Antonakakis, et al 2015). Using data from the World Travel and Tourism Council, Chou (2013) describes the economic importance of tourism as follows: "The total impact of the industry is impressive.…”