Tourism Specialization, Absorptive Capacity and Economic Growth

Glauco De Vita, K. S. Kyaw

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    46 Citations (Scopus)
    76 Downloads (Pure)

    Abstract

    This paper investigates the relationship between tourism specialization and economic growth whilst accounting for the absorptive capacity of host (tourism destination) countries, defined in terms of financial system development. We use the system generalized methods-of-moments (SYS-GMM) estimation methodology to investigate this relationship for 129 countries over the period 1995-2011. The results support the hypothesis that the positive effect of tourism specialization on growth is contingent on the level of economic development as well as the financial system absorptive capacity of recipient economies. Consistent with the law of diminishing returns, we also find that for countries with a developed financial system, at exponential levels of tourism specialization its effect on growth turns negative. Significant policy implications flow from these findings.
    Original languageEnglish
    Pages (from-to)423-435
    JournalJournal of Travel Research
    Volume56
    Issue number4
    Early online date18 May 2016
    DOIs
    Publication statusPublished - 1 Apr 2017

    Keywords

    • tourism specialization
    • absorptive capacity
    • economic growth
    • financial development
    • SYS-GMM

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