Tourism and economic development: The beach disease?

This paper analyses empirically the danger of a Dutch Disease Effect in tourism dependent countries in the long run. Data on 134 countries of the world over the period 1970–2007 is used. In a first step the long-run relationship between tourism and economic growth is analysed in a cross-country sett...

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Bibliographic Details
Published in:Tourism management (1982) 2011-08, Vol.32 (4), p.922-933
Main Author: Holzner, Mario
Format: Article
Language:English
Subjects:
Dutch disease
Economic development
Tourism
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Summary:This paper analyses empirically the danger of a Dutch Disease Effect in tourism dependent countries in the long run. Data on 134 countries of the world over the period 1970–2007 is used. In a first step the long-run relationship between tourism and economic growth is analysed in a cross-country setting. The results are then checked in a panel data framework on GDP per capita levels that allows to control for reverse causality, non-linearity and interactive effects. It is found that there is no danger of a Beach Disease Effect. On the contrary, tourism dependent countries do not face real exchange rate distortion and deindustrialisation but higher than average economic growth rates. Investment in physical capital, such as for instance transport infrastructure, is complementary to investment in tourism.
ISSN:0261-5177
1879-3193
DOI:10.1016/j.tourman.2010.08.007