Why Are Tourism Countries Small and Fast-Growing?
University of Cagliari and CRENoS
Fondazione Eni Enrico Mattei (FEEM), Milan; Centre for North South Economic Research (CRENos)
International tourism is today one of the most important tradable sectors, with expenditure on tourist goods and services representing some 8% of total world export receipts and 5% of world GDP. Cross-country data for 1985-95 on tourism specialisation and economic growth reveal the following regularities: (i) many tourism countries have grown faster compared to the other countries; and (ii) they are small. We use a two-sector endogenous growth model to obtain explanatory hypotheses about these two findings. 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 a country's relative endowment of the natural resource, rather than its absolute size.
Number of Pages in PDF File: 10
JEL Classification: O1, O4, Q2working papers series
Date posted: January 29, 1999
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo7 in 1.610 seconds