Year: 2011
Author: de Mello-Sampayo, Felipa, de Sousa-Vale, Sofia
Applied Economics Quarterly, Vol. 57 (2011), Iss. 4 : pp. 303–324
Abstract
This paper applies likelihood-based panel cointegration techniques to examine the existence of a long run relationship between GDP, tourism earnings per tourist and total trade volume for a panel of European countries over the period 1988–2010. Removing the cross dependency, our panel tourism-led growth model indicates that tourism development has a higher impact on GDP in the North than in South European countries. Furthermore, the volume of trade shows a significant and much stronger effect on the long run economic growth in our sample economies than tourism does. The policy implication of these results is that the impact of tourism development on growth when compared to the impact of international trade while facing a budget constraint leads us to conclude that the best strategy is for countries to invest in trade rather than in tourism.
JEL Classification: F43; C33; L83
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Journal Article Details
Publisher Name: Global Science Press
Language: English
DOI: https://doi.org/10.3790/aeq.57.4.303
Applied Economics Quarterly, Vol. 57 (2011), Iss. 4 : pp. 303–324
Published online: 2011-10
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 22