Tourism and Regional Growth in Europe

Abstract

The aim of this paper is to analyze the impact of domestic and international tourism on the economic growth process for 179 regions in ten European countries, which are highly representative of total tourism flows. The econometric analysis is performed for the period 1999-2009 and is based on a spatial growth regression framework, where the rate of GDP per capita growth at the regional level depends on tourism flows in addition to traditional production inputs, such as physical, human and technological capital. In addition to controlling for initial conditions, we also include covariates for the geographical, social and institutional features of the regions. The results, which are robust to several robustness checks, demonstrate the positive effect of domestic and international tourism flows on regional growth.

Keywords: regional economic growth, tourism flows, spatial dependence, Europe

JEL Classification: R11, L83, C31