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The study aims to investigate the nexus between total factor productivity and tourism growth in Latin American countries for time series data from 1995 to 2017.
Abstract
Purpose
The study aims to investigate the nexus between total factor productivity and tourism growth in Latin American countries for time series data from 1995 to 2017.
Design/methodology/approach
Using the extension of the Granger noncausality test in the nonlinear time-varying of Ajmi et al. (2015), the study points out the interconnectedness between the variables during the period.
Findings
The study found nonlinear causality between the variables. Particularly, studying the conclusions for the time-varying Granger causality fashion, it can be noticed that the one-way causality from total factor productivity to tourism growth is obtained for Argentina, Bolivia, Brazil, Uruguay and Venezuela, while the vice versa is confirmed for Chile, Ecuador and Nicaragua. Lastly, the study dissected the plots of the curve causality.
Practical implications
In view of the results, some crucial policy implications could be suggested, such as, under certain circumstances and as an exceptional case, the use of policy instruments such as targeted investment, marketing and the support of tourism organizations focused on driving a tourism-led-based productivity and/or tourism programs and projects.
Originality/value
The current work is distinguished from the existing body of understanding in several substantial directions. This work explores, for the first time, the linkages between the total factor productivity index and tourism growth for Latin American countries. No single attempt has been known to investigate this interaction by using nonlinear causality, and this study determines the shape of the curve between the total factor productivity index and tourism growth for each country.
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Based on a panel vector error correction model (PVECM), this study aims to investigate the impact of foreign direct investment (FDI) on tourism development in a selected group of…
Abstract
Purpose
Based on a panel vector error correction model (PVECM), this study aims to investigate the impact of foreign direct investment (FDI) on tourism development in a selected group of 17 small island economies during 1995-2018. In the long run, a positive and direct relationship was found between foreign investment and tourists’ arrival. Moreover, economic performance and tourists’ income were also found to be key determinants of tourism development. It is further observed that there is bidirectional causality between the two variables. Hence, one can argue that FDI is a key element for tourism development. So, if the countries can attract more FDI and grow economically, these elements will contribute positively to the sector in the future.
Design/methodology/approach
This work uses rigorous dynamic time series analysis, namely, a dynamic PVECM, which takes into account dynamism and endogeneity issues in tourism modelling. Furthermore, the PVECM is also appropriately suited for integrating short- and long-run analysis.
Findings
The results confirm that FDI has been an important ingredient in the tourism development of the island economies in the long run. Interestingly, a bidirectional causality between FDI and tourism development is validated. Moreover, growth will as well be important. So, if the country can attract more FDI and grow economically, these elements will attract the tourists of the future.
Originality/value
Relatively few studies have rigorously studied the relationships between FDI and tourism development, particularly with respect to developing countries and small island states which rely heavily on tourism as well as FDI. As such existing research has neglected dynamic and reverse causality analysis in their respective FDI-tourism modelling. This study thus attempts to address the above and supplement the literature by investigating the direct and indirect relationship between FDI and tourism development for the case of small island economies over the period 1995-2018. Moreover, the implication of foreign capital inflows on tourism futures will as well be developed.
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Claudia Susana Gómez López and Karla Susana Barrón Arreola
This paper aims to study the relationship between employment and tourism activities as well as economic variables for the 32 states of Mexico for the period 1999-2014.
Abstract
Purpose
This paper aims to study the relationship between employment and tourism activities as well as economic variables for the 32 states of Mexico for the period 1999-2014.
Design/methodology/approach
To study the case of Mexico, the authors use panel data and cointegration panel data. They also use geographic information systems to observe changes over time between the variables, which is useful in the empirical evidence.
Findings
The main results obtained by the models are as following: domestic tourism is the variable with the greatest impact on the generation of direct employment in the tourism sector, a finding supported by both methodologies; economic growth (measured by state gross domestic product) also directly impacts the generation of employment; and the cointegration of the panels causes a long-term equilibrium among the states and some variables.
Research limitations/implications
The model used leaves out other variables that may influence the performance of the tourist activity. In addition, given the availability of official and homogeneous information, it only covers what has been documented up to 2014.
Social implications
The aim is to measure the impact of tourism on the variables at the state level, where the economic activities could be based on public policies, as well as the importance of tourism activities in generating employment. In this sense, the impact would be in channeling efforts to support the main economic activities and could serve as a starting point for the evaluation of programs to promote domestic tourism.
Originality/value
This paper reviews the relationship that exists between tourism activity and its effect on other variables, especially employment. It is the first time that these topics are studied for the Mexican economy.
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Korak Bhaduri and Shivendra Pandey
The purpose of this paper is to investigate the impact of information and communication technology (ICT) development and terrestrial and marine protection on the economic and…
Abstract
Purpose
The purpose of this paper is to investigate the impact of information and communication technology (ICT) development and terrestrial and marine protection on the economic and environmental sustainability of small-island tourism countries. The current study expands the smart specialisation literature in the context of small-island tourism nations. It also proposes sustainable future growth strategies for these countries.
Design/methodology/approach
This paper adopted structural equation modelling using the data of 14 island nations between 1995 and 2014. The selection of countries was based on a set of criteria borrowed from literature.
Findings
The results indicate that the development of ICT infrastructure was not only associated with a higher inflow of tourists and a higher GDP per capita but also with a higher carbon dioxide (CO2) emission. Results also suggest that higher protection of terrestrial and marine areas has no impact on tourist inflows in tourism countries. Also, higher protection decreases the dependence of the total output on the tourism sector.
Research limitations/implications
A limitation of this study is the lack of available macro data on some other relevant variables for the countries studied.
Social implications
Following the findings of this study, the governments of these countries should make stringent environmental regulations and relax the telecom regulations for sustainable smart specialisation.
Originality/value
This study presents a novel insight into the sustainability challenge of island nations through the lens of smart specialisation. It also contributes to the literature on ICT and development.
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This paper aims to consider the role of geopolitical risk in explaining tourism demand in India, a major tourist destination of the Asian region. Furthermore, the study also…
Abstract
Purpose
This paper aims to consider the role of geopolitical risk in explaining tourism demand in India, a major tourist destination of the Asian region. Furthermore, the study also considers how in addition to geopolitical risk, economic policy uncertainty, economic growth, exchange rate, inflation and trade openness impact tourism demand.
Design/methodology/approach
The Bayer and Hanck (2013) method of cointegration is applied to explore the relationship between geopolitical risk and tourism demand. Furthermore, the study has also used the auto distributed lag model to determine whether there is a long-run cointegrating association between tourism demand, geopolitical risk, economic policy uncertainty, economic growth, exchange rate and trade openness. Finally, the vector error correction model confirms the direction of causality across the set of the major variables.
Findings
This paper finds that geopolitical risk adversely impacts inbound international travel to India. This study also obtains the consistency of the results across different estimation techniques controlling for important macro variables. The Granger causality test confirms the unidirectional causality from geopolitical risk to tourism and further from economic uncertainty to tourism. The findings from the study confirm that geopolitical risks have long-term repercussions on the tourism sector in India. The results indicate that there is an urgent need to develop a pre-crisis management plan to protect the aura of Indian tourism. The tourism business houses should develop skilful marketing strategies in the post-crisis to boost the confidence of the tourists.
Research limitations/implications
This paper provides valuable practical implications to tourism business houses. The tourism business houses can explore geopolitical risk measure and economic policy uncertainty measure to analyse the demand for international tourism in India. Further, the major stakeholders can establish platforms to help tourists to overcome the fear associated with geopolitical risk.
Originality/value
This study is the first of its kind to explore the geopolitical risks and their long-run consequences in the context of tourism in India. The study puts emphasis on the role of national policy to maintain peace otherwise it would be detrimental to tourism.
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Ryan Peterson and Robin B. DiPietro
Drawing on theories of development economics and sustainable tourism, this research explores the differences between sovereign and nonsovereign small island tourism economies…
Abstract
Purpose
Drawing on theories of development economics and sustainable tourism, this research explores the differences between sovereign and nonsovereign small island tourism economies (SITEs) and identifies the antecedents and effects of overtourism in the Caribbean.
Design/methodology/approach
The research design is based on a comparative case study of selected Caribbean SITEs. Case study research involves a detailed empirical inquiry that investigates a contemporary phenomenon within its real-life context. The main purpose of a case study is to provide a contextual analysis of the conditions and processes involved in the phenomenon under study. A comparative case study is an appropriate research methodology to explore new multi-faceted concepts with limited empirical evidence.
Findings
The results confirm previous studies that nonsovereign SITEs have a distinctive overdrive toward tourism specialization. Moreover, the findings indicate that overtourism is driven by both global and domestic policy factors and generates significant economic volatility, social inequality and ecological stress. The paper discusses the tourism policy implications of the evolving economic disconnectedness, environmental decay and social tensions in SITEs in the Caribbean.
Originality/value
Policy recommendations are presented for transitioning toward a more inclusive development and strengthening the resilience of small island tourism development in the Caribbean.
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Taiwo Temitope Lasisi, Samuel Amponsah Odei and Kayode Kolawole Eluwole
The current study is designed to investigate the factors that foster the framing of destination competitiveness and establish the factors that drive the contribution of tourism…
Abstract
Purpose
The current study is designed to investigate the factors that foster the framing of destination competitiveness and establish the factors that drive the contribution of tourism innovations to economic growth in smart tourism destinations.
Design/methodology/approach
A four-year panel data were extracted from the World Economic Forum's travel and tourism competitiveness index and data were analysed using Poisson Pseudo Maximum Likelihood regression model.
Findings
The findings demonstrate that both the enabling environment and airport infrastructure significantly affect tourism's impact on the economy of the selected smart European tourism destinations. Conversely, human resources and general infrastructure display a negative correlation with tourism's contribution to the economy. However, no data in the sample support the idea that tourism policies, government prioritization or readiness of tourism information and communication technologies impact tourism's contribution to the economy. Additionally, the marginal effects indicate that improving the enabling environment and airport infrastructure can generate additional benefits for the economy through tourism.
Originality/value
The uniqueness of this study is the integration of smart tourism destinations with the measure of destination competitiveness to provide an empirical bridge that links tourism competitiveness to economic growth.
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