The impact of geopolitical risk on tourism

ABSTRACT

In this paper, we examine the impact of geopolitical risk on the demand for tourism service export. Using structural VAR model and U.S. monthly data from January 1999 to August 2020, we find that geopolitical risk has a negative and significant impact on tourism service exports. Our results reveal that, in the long-run, a one-standard-deviation shock in geopolitical risk shock explains about 12.6% of the variations in tourism net service exports.

KEYWORDS:

• Geopolitical risk
• Tourism
• Tourism service export
• Structural VAR (SVAR)

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 URL: https://www.commerce.gov/news/blog/2019/11/travel-and-tourism-sector-supports-78-million-jobs-and-accounts-28-us-gdp-2018 and https://apps.bea.gov/scb/2019/11-november/1119-travel-tourism-satellite-account.htm.