Does public policy alleviate the impact of political risks on international tourism?

ABSTRACT

Based on panel data of 138 countries from 1995 to 2019, this study fills the gap in the research of tourism risk mitigation mechanism by adopting the SYS-GMM method for the first time and innovatively verifying whether public policy can mitigate the impact of political risk on tourism from an international perspective. The study finds that political risk has a significant negative impact on international tourism and a far greater impact on tourist arrivals than on tourism economy. Heterogeneity results suggest that tourism in low-income countries is more susceptible to political risk, which has a greater impact on tourism in underdeveloped regions (e.g. Africa, Asia-Pacific). Interestingly, public policy can effectively mitigate the negative impact of political risk on international tourism, with the greatest mitigation effect on tourist arrivals and tourism revenues. This study helps policymakers to accurately grasp the impact of political risk on international tourism and provides targeted suggestions for countries to deal with political risk.

KEYWORDS:

• Political risk
• international tourism
• public policy
• SYS-GMM
• moderating effect

Acknowledgements

We have an appreciation to the Editor and anonymous referees for the very useful comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the project of High-end Think Tank of Central South University [grant number 2021znzk01]; the Key Project of Think Tank in Hunan Province [grant number 18ZWB19]; Annual Innovation-driven Project in Central South University [grant number 2019CX016]; National Natural Science Foundation of China [grant number 71874207]; Natural Science Foundation of Hunan province of China [grant number 2019JJ40346]; Project of Postgraduate Teaching Case Bank of Central South University [grant number 2021ALK14]; the Major Project of National Social Science Fund [grant numbers 18ZDA049, 18ZDA061, 21&ZD103].