Tourism and growth in european countries : an application of likelihood-based p...

• Author(s): Mello-Sampayo, Felipa de ; Sousa-Vale, Sofia de
• Date: 2012
• Persistent ID: http://hdl.handle.net/10400.5/4419
• Origin: Repositório da UTL
• Subject(s): Tourism; Economic growth; Rank tests; Panel unit root tests; Panel cointegration
• Document Type: Other
• Language: English

Description

This paper applies likelihood-based panel cointegration techniques to examine the exis- tence of a long run relationship between GDP, tourism earnings per tourist and total trade volume for a panel of European countries over the period 1988{2010. Removing the cross dependency, our panel tourism-led growth model indicates that tourism development has a higher impact on GDP in the North than in South European countries. The policy implication of this result is that for this group of countries, the best strategy is to raise tourism receipts. Furthermore, the volume of trade shows a significant and much more stronger effect on the long run economic growth in our sample economies than tourism does.