nep-tur New Economics Papers
on Tourism Economics
Issue of 2016‒03‒23
five papers chosen by
Laura Vici
Università di Bologna

  1. Tax Incentives and Job Creation in the Tourism Industry of Brazil By Grégoire Garsous; David Corderi; Mercedes Velasco; Andrea Colombo
  2. Dynamic Inter-relationships among tourism, economic growth and energy consumption in India By Tang, Chor Foon; Aviral Kumar, Tiwari; Shahbaz, Muhammad
  3. Management by good intentions and best wishes: on sustainability, tourism and transport investment planning in Sweden By Nerhagen, Lena
  4. The not so "all inclusive" tourism in Jamaica: Economic linkages to local supply By Gordon, Leo-Rey; Harris, Mark
  5. Economic Impact of the Tokyo 2020 Olympic Games By Mitsuhiro Osada; Mayumi Ojima; Yoshiyuki Kurachi; Ko Miura; Takuji Kawamoto

  1. By: Grégoire Garsous; David Corderi; Mercedes Velasco; Andrea Colombo
    Abstract: In recent decades, a significant number of developing countries have implemented fiscal incentives programs for the tourism industry as part of their regional development policies. The main objective of these programs is to increase local investment and employment, as tourism activities are labor intensive. However, little evidence is available to assess the effect of these policies on job creation in emerging markets. In this paper, we analyze a program of fiscal incentives introduced by the Brazilian federal government in the SUDENE area in 2002 and in which tourism firms were eligible to participate. Through a difference-in-difference estimation, we compare before and after 2002 the change in the logarithm of local employment in the SUDENE municipalities (the treatment group) to the change in the same outcome in a group of municipalities that were not affected by the program (the control group). Our empirical analysis provides robust evidence that the fiscal incentives led to a substantial increase in tourism employment in the SUDENE region. In particular, we find that local employment in the tourism industry was on average 34 percent higher in the treatment group. This result does not seem to be affected by either displacement effect or job destruction in those neighboring municipalities that had not benefited from the same tax incentives.
    Keywords: employment; public economics; regional development; tax incentives; tourism
    JEL: H25 H71 J20 L83 R58
    Date: 2016–03
  2. By: Tang, Chor Foon; Aviral Kumar, Tiwari; Shahbaz, Muhammad
    Abstract: This study attempts to explore the dynamic causal and inter-relationships among tourism, economic growth and energy consumption in India. This study covers the annual data from 1971 to 2012. This study applies the cointegration and generalised variance decomposition methods to verify the relationship. The bounds testing approach to cointegration and the Gregory-Hansen test for cointegration with structural break consistently reveal that energy consumption, tourism and economic growth in India are cointegrated. We find that tourism and economic growth strongly affects energy consumption in the long-run. Additionally, we also find that tourism and economic growth in India are inter-related, but the causal effect of tourism on economic growth is stronger than the other way around in both the short- and long-run. Therefore, this study concludes that the tourism-led growth hypothesis is valid but the energy-led growth hypothesis is invalid in India. With such findings, we can confirm that tourism is an important catalyst of growth to the Indian economy. Therefore, policymakers should promote and expand tourism industry in order to sustain the process of economic growth and development in India.
    Keywords: Cointegration; Economic growth; Energy consumption, Tourism; Variance decomposition
    JEL: C0
    Date: 2016–03–01
  3. By: Nerhagen, Lena (VTI)
    Abstract: The Swedish government, despite a possible value conflict with the ambitious Swedish climate mitigation objectives, has stated that tourism development is an important basis for economic growth, not least in rural areas. This paper explores how the Swedish policy making system, and ambitious environmental and traffic safety objectives, influence transport investment planning at the regional level. Our point of reference for evaluating the system is the work with good regulatory policy advocated by the OECD and used by the EU. The main finding is that the Swedish government and parliament lack a strategic “whole-of-government approach” to sustainable transport development. There are many principles and objectives with good intentions established at the national level that are incompatible in practice. The conflicts that follow are handed down to lower government levels to solve with best wishes. The problem with this type of management is the “tragedy of the commons.” Without clear guidance, individuals (and administrations) acting independently and rationally based on self-interests are likely to behave contrary to the best interests of the whole group (society). Making choices based on a more holistic assessment of impacts and benefits and costs could help to prevent this kind of outcome. However, from the data collected it appears that many investments are undertaken without being assessed due to the lack of government instructions on regulatory impact assessment. Other investments are undertaken despite having a negative net benefit. One reason for this is specific instructions given by the government that points to certain investments. Another reason seems to be the Vision Zero policy established by the parliament. In recent years this policy has been a strong driver of improvements of the road system. Seen from an environmental perspective, the unwanted consequence of the priorities made is that state roads become faster and safer and thereby a more attractive alternative to other travel modes. Seen from a regional development and tourism perspective, this may have diverted resources away from investments that would have yielded a greater benefit to the tourism industry in “rural” areas.
    Keywords: Sustainable transport; Tourism; Multi-level-governance; Regulatory impact assessment
    JEL: H77 R42
    Date: 2016–03–04
  4. By: Gordon, Leo-Rey; Harris, Mark
    Abstract: The government of Jamaica enacted a strategic master plan in 2010 to encourage the tourism sector’s inclusiveness by enhancing the participation of villas and other small lodging accommodations, increasing the use of locally grown produce, and encouraging commercial activity with formal and informal goods and services providers. An inclusive industry with strong economic linkages should encourage broader distribution of income and welfare. Field work was undertaken to assess stakeholders’ views on their commercial activity with the tourism industry. The sampled participants report stagnant and in some cases declining economic linkages with the industry. The results indicate that initiatives should be further undertaken to ensure a wider economic reach of the nation and region’s largest sector.
    Keywords: economic development; tourism; linkages; Caribbean
    JEL: O1 O19
    Date: 2015
  5. By: Mitsuhiro Osada (Bank of Japan); Mayumi Ojima (Bank of Japan); Yoshiyuki Kurachi (Bank of Japan); Ko Miura (Bank of Japan); Takuji Kawamoto (Bank of Japan)
    Abstract: The Tokyo Olympics, scheduled to be held in 2020, can be expected to have positive effects on the Japanese economy. Such effects will come mainly through the following two demand channels: (i) an increase in foreign tourism, and (ii) an increase in construction investment associated with this event. The number of foreign visitors to Japan has been growing steadily, mainly due to the easing of visa requirements and the depreciation of the yen. The government fs target of reaching 20 million foreign visitors by 2020 will likely be achieved. Nevertheless, taking other countries as a yardstick, there is still ample room for an increase in the number of foreign visitors, and it is certainly possible to further promote tourism in Japan, for example by reinforcing measures to attract foreign tourists in the run-up to the Tokyo Olympics. The experience of past host countries shows that the key is to achieve a lasting increase in tourism by promoting touristic resources nationwide. For Japan, this means, for example, establishing routes that allow tourists coming to Japan for the Olympic Games to make excursions to regional areas in addition to visiting the Tokyo metropolitan area. Construction investment associated with the Tokyo Olympics includes not only that directly related to the building of facilities for the Olympic Games, but also various types of indirectly related construction investment, such as the construction of new hotels and the refurbishment of existing hotels in the private sector, urban redevelopment, the construction of commercial facilities, and the enhancement of transportation infrastructures. Based on the experience of previous host countries, construction investment associated with the Tokyo Olympics is projected to increase substantially during 2017 and 2018 and then peak out toward around 2020. To avoid large business cycle fluctuations due to the boom-and-bust in construction investment, it is necessary to create new demand through various measures to help strengthen economic growth such as deregulation in addition to the measures to attract tourists mentioned above. At the same time, in order to meet such new demand, supply-side efforts should be taken to tackle the structural labor shortage facing Japan today by increasing labor productivity and further raising labor participation of women and the elderly.

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