Estimating the effects of regional political climate on Russian tourists to Spain

Abstract

Regional political climate has become an increasingly significant force influencing travel behaviour in many tourist destinations. This paper attempts to address impacts of regional political stability on Russian inbound tourism into Spain within a demand model framework and using a cointegration approach. The results show that visa openness as well as political instability and civil unrest in substitute destinations attract more Russian tourists, boosting economic growth and reducing unemployment rates in Spain. On the contrary, international political confrontation results in disadvantage to Russian tourism demand to Spain.

Keywords:

• visa
• political instability
• international tourism demand
• cointegration
• Spain

Notes

1 Specifically, the date of entry into force of the agreement between the European Community and the Russian Federation on the facilitation of the issuance of visas was in June 2007.

2 The trace and eigenvalue tests indicate one cointegration vector at 5% level.

3 $v_{\mathrm{t}}$is the disturbance term and the parameters ${\beta }_1,{\beta }_2\mathrm{y}{\beta }_3$ can be interpreted as the elasticities if the variables are taken in logarithms. The variables Y and I have been seasonally adjusted using Census-X12.

4 The coefficient of ECT describes the speed of the adjustment back from any deviation from the long-run equilibrium. This coefficient must have a negative sign and be statistically significant to corroborate cointegration.

5 For sake of brevity, only the results of the variables representing the effects of regional political climate are reported here, but the coefficients and confidence intervals of the difference variables can be sent upon request.

6 The estimated coefficient associated with the ECT (÷0.13) is statistically significant and corroborates the existence of a long run relationship between the dependent and the explanatory variables. The deviation of the long run equilibrium caused by a shock is corrected by 13% over the following month. The diagnoses tests on the ECM allow us to validate the consistency and robustness of the results of the estimation process.