| Abstract: |
The significant impact of international tourism in stimulating economic growth
is especially important from a policy perspective. For this reason, the
relationship between international tourism and economic growth would seem to
be an interesting empirical issue. In particular, if there is a causal link
between international tourism demand and economic growth, then appropriate
policy implications may be developed. The purpose of this paper is to
investigate whether tourism specialization is important for economic
development in East Asia and the Pacific, Europe and Central Asia, Latin
America and the Caribbean, the Middle East and North Africa, North America,
South Asia, and Sub-Saharan Africa, over the period 1991-2008. The impact of
the degree of tourism specialization, which is incorporated as a threshold
variable, on economic growth is examined for a wide range of countries at
different stages of economic development. The empirical results from threshold
estimation identify two endogenous cut-off points, namely 14.97% and 17.50%.
This indicates that the entire sample should be divided into three regimes.
The results from panel threshold regression show that there exists a positive
and significant relationship between economic growth and tourism in two
regimes, the regime with the degree of tourism specialization lower than
14.97% (regime 1) and the regime with the degree of tourism specialization
between 14.97% and 17.50% (regime 2). However, the magnitudes of the impact of
tourism on economic growth in those two regimes are not the same, with the
higher impact being found in regime 2. An insignificant relationship between
economic growth and tourism is found in regime 3, in which the degree of
tourism specialization is greater than 17.50%. The empirical results suggest
that tourism growth does not always lead to economic growth. |