Spillover Effects of Tourism Policy Changes on Hospitality Industries

Abstract

This study aimed at using the industry-related spillover model to examine the spillover effects of the change in tourism policy and employed the induced employment model and the gross-induced added value model to measure the employment income, gross added value, and employment creation. Our results showed evidence that the consumption of Chinese tourists visiting Taiwan has brought a substantial impact on the hospitality and restaurant industries. In addition, the economy of scale created in the restaurant industry was smaller than that in the hospitality industry, since Chinese tourists allocated less expenditure for food. However, the spillover effects in the restaurant industry were larger than that in the hospitality industry.

Keywords: Change in Tourism Policy, Employment, Added Value, Spillover Effect

JEL Classification: C67, D57