Inbound tourism and long-run economic growth

Abstract

There is an upsurge of literature investigating the relationship between inbound tourism expansion and economic growth with special emphasis on developing countries. Some countries – such as Spain and Italy – can be taken as examples of demonstrating such a successful trajectory. This paper provides an empirical investigation of the evolution of the Spanish and Italian economies and their respective tourism sectors from the 1950s and 1960s, respectively. This research is theoretically based on the literature on demand-based growth and the methodology adopted is that of the integration, cointegration and multivariate Granger causality tests. The results show the influencing role of inbound tourism for both economies.

Keywords:

• inbound tourism
• economic growth
• production function
• cointegration
• multivariate analysis

Acknowledgements

Dr Manuela Pulina acknowledges the financial support provided by the Banco di Sardegna Foundation (SECS-P/01 - Economia Politica). Dr Isabel Cortés Jiménez acknowledges the financial support of the Government of Catalonia (Stays abroad for Researchers) and thanks the useful comments of Dr. Maria Carme Riera i Prunera and Prof. Chris Cooper. The authors would like to thank the anonymous referees for their insightful comments. However, the views expressed here are those of the authors.