How Fast are the Tourism Countries Growing? The Cross-Country Evidence

32 Pages Posted: 13 Oct 2003

See all articles by Rinaldo Brau

Rinaldo Brau

Università di Cagliari - Department of Economics & Business; Universita di Cagliari - Centre for North South Economic Research (CRENOS)

Alessandro Lanza

Fondazione Eni Enrico Mattei (FEEM), Milan; CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici; Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy

Francesco Pigliaru

University of Cagliari and CRENoS

Date Written: September 2003

Abstract

Specializing in tourism is an option available to a number of less developed countries and regions. But is it a good option? To answer this question, we have compared the relative growth performance of 14 "tourism countries" within a sample of 143 countries, observed during the period 1980-95. Using standard OLS cross-country growth regressions, we have documented that the tourism countries grow significantly faster than all the other sub-groups considered in our analysis (OECD, Oil, LDC, Small). Moreover, we have shown that the reason why they are growing faster is neither that they are poorer than the average; nor that they have particularly high saving/investment propensities; nor that they are very open to trade. In other words, the positive performance of the tourism countries is not significantly accounted for by the traditional growth factors of the Mankiw, Romer and Weil type of models. Tourism specialization appears to be an independent determinant. A corollary of our findings is that the role played by the tourism sector should not be ignored by the debate about whether smallness is harmful for growth (e.g. Easterly and Kraay (2000), who conclude that there is no growth disadvantage in smallness). Half of the thirty countries classified as microstates in this literature are heavily dependent on tourism. Once this distinction is adopted, it is easy to see that the small tourism countries perform much better than the remaining small countries. In our findings, smallness per se can be bad for growth, while the opposite is true when smallness goes together with a specialization in tourism.

Keywords: Economic growth, Convergence, Tourism specialization, Sustainable development

JEL Classification: O11, O41, O57, Q01

Suggested Citation

Brau, Rinaldo and Lanza, Alessandro and Pigliaru, Francesco, How Fast are the Tourism Countries Growing? The Cross-Country Evidence (September 2003). FEEM Working Paper No. 85.2003. Available at SSRN: https://ssrn.com/abstract=453340 or http://dx.doi.org/10.2139/ssrn.453340

Rinaldo Brau

Università di Cagliari - Department of Economics & Business ( email )

V. S. Ignazio 17
Cagliari 09123, CA 09123
Italy
+39 070 6753315 (Phone)
+39 178 2243016 (Fax)

Universita di Cagliari - Centre for North South Economic Research (CRENOS) ( email )

V. S. Ignazio 78
Cagliari, 09124
ITALY

Alessandro Lanza

Fondazione Eni Enrico Mattei (FEEM), Milan

Corso Magenta 63
20123 Milan
Italy

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici ( email )

via Augusto Imperatore, 16
Bologna, I-73100
Italy

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

viale Filippetti, 9
Milan, 20122
Italy

Francesco Pigliaru (Contact Author)

University of Cagliari and CRENoS ( email )

Viale S. Ignazio, 78
Cagliari I-09123
Italy
070-6753818 (Phone)
070-6753760 (Fax)

HOME PAGE: http://francescopigliaru@blogspot.com

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