Tourism specialization, growth stage, and economic growth

Abstract

This paper investigates the nonlinear relationship between tourism and economic growth using a balanced sample of 58 countries in three continental samples (Africa, Asia, and Latin America) for the 2003–2017 period. First, we document an asymmetric threshold effect of tourism on economic growth. By utilizing an endogenous threshold regression model, we show that a single tourism threshold cutoff exists and that tourism receipts influence growth only till the threshold cutoff point in all three continental samples; however, this influence is nonexistent past the threshold point. Second, a quantile effect decomposition shows separate marginal effects for the tourism and economic growth relationship across the growth distribution. By using an unconditional quantile regression approach, we show that compared to their regional cohorts, slow- and medium-growth African countries, slow-growth Asian countries, and medium-growth Latin American countries exhibit substantially higher economic growth benefits from tourism. We explain these empirical observations and discuss their policy implications.

Modelling the asymmetric productivity effects of tourism demand

“…3 Generally, the countries in the “most dependent sample” have lower per-capita incomes (Table 2). The economic implication is that tourism is an important driver of growth when the level of economic development is low consistent with the PNARDL results in Table 6 (Sahni et al, 2022; Saboori et al, 2022). Surprisingly, tourism also has a noticeably large effect on economic growth in advanced economies (Table 7).…”

“…Advanced and Middle Eastern economies are likely to have relatively lower specialization in tourism. This agrees with Sahni et al (2022) and Saboori et al (2022) who find that tourism is a significant driver of economic growth in countries with low levels of specialization in tourism.…”

“…Advanced countries have more diversified economies, and thus, are likely to have low levels of specialization in tourism (c.f. Sahni et al, 2022). The findings agree with Sahni et al (2022) and Saboori et al (2022) who find that economic growth gains from tourism occur at low levels of tourism specialization.…”

“…Sahni et al, 2022). The findings agree with Sahni et al (2022) and Saboori et al (2022) who find that economic growth gains from tourism occur at low levels of tourism specialization. The larger growth effect may be the outcome of a well-developed infrastructure that allows advanced countries to better utilize the benefits of tourism (Kumar et al, 2020).…”

Spatiotemporal evolution and mechanisms of tourism efficiency and its decomposition: Evidence from 63 counties in Zhejiang, China

“…Quantile regression is an estimation approach for examining the linear relationships between quantiles of independent variables and the dependent variable, which allows us to determine all the conditional distribution of the dependent variable based on certain independent variables. The result of Quantile regression is more efficient and robust [20,40,41]. Suppose the probability distribution of the dependent variable Y is as follows:…”