Essays on tourism and its determinants

Abstract

This thesis is based on four essays dealing with tourism development and its determinants. Chapter Two explores the different definitions of ‘tourism’ and ‘tourist’, as well as the factors that influence tourism arrivals. We discuss traditional and more recent theories that underlie the study of the tourism industry. The third chapter examines the effect of tourism upon economic growth, investigating the effects of tourism specialization within tourism-exporting countries and non-tourism-exporting countries annually over the period 1995–2007, applying panel-data methods in cross-sectional growth regressions. This study finds that tourism does not affect economic growth in either underdeveloped or developed countries. Moreover, tourism might cause Dutch Disease in tourism-exporting countries owing to their over-reliance on the exporting of non-traded goods. Chapter Four seeks to identify how institutional quality and aspects of infrastructure (internet access measured by size of country or per 100 people) influence tourist arrivals in a whole sample of 131 countries and in sub-samples comprising developed and developing countries (as defined by IMF criteria) using static and dynamic panel data. The findings indicate that internet access enhances the tourism industry, and most interestingly, that good governance is one of the most influential factors for improving and developing tourism. Chapter Five diagnoses the determinants of tourism flows using panel-data sets including 134 originating countries and 31 destination countries (selected depending on data availability) focusing on ICRG data for the period 2005–2009. The methodology makes use of basic and augmented gravity equations, together with the Hausman-Taylor and Poisson estimation techniques, whilst comparing the performance of the three gravity-equation methods. The results suggest that lower levels of political risk contribute to an increase in tourism flows. Furthermore, common language (positively), common currency (negatively) and political factors (particularly institutional quality) are the most prominent determinants in promoting (or deterring) tourism. Chapter Six gives concluding remarks.