Prospects and Limits of Tourism-Led Growth: The International Evidence

The Rimini Centre for Economic Analysis WP 41-09

21 Pages Posted: 30 Oct 2009 Last revised: 12 Jun 2014

See all articles by Adamos Adamou

Adamos Adamou

University of Cyprus - Department of Economics

Sofronis Clerides

University of Cyprus - Department of Economics; Centre for Economic Policy Research (CEPR); University of Bologna - Rimini Center for Economic Analysis (RCEA)

Date Written: October 1, 2009

Abstract

We investigate the relationship between tourism specialization and economic growth. We deviate from previous studies - which have reported mixed evidence - by allowing the relationship to take a nonlinear form. We nd that tourism specialization is associated with higher rates of economic growth at relatively low levels of specialization but eventually diminishing returns set in and tourism's contribution becomes minimal. The policy lesson is that there is promise for tourism-led growth in developing countries but other economic activities must also be developed in order to carry the economy forward once the potential of tourism-led growth has been exhausted.

Keywords: tourism, tourism specialization, economic growth

JEL Classification: F43, O57

Suggested Citation

Adamou, Adamos and Clerides, Sofronis, Prospects and Limits of Tourism-Led Growth: The International Evidence (October 1, 2009). The Rimini Centre for Economic Analysis WP 41-09 . Available at SSRN: https://ssrn.com/abstract=1495747 or http://dx.doi.org/10.2139/ssrn.1495747

Adamos Adamou

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
Nicosia, 1678
Cyprus

HOME PAGE: http://ucy.ac.cy/dir/el/component/comprofiler/userprofile/adamos

Sofronis Clerides (Contact Author)

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus
+35 7 2289 2450 (Phone)
+35 7 2289 2432 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

University of Bologna - Rimini Center for Economic Analysis (RCEA) ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

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