Tourism and urban economic growth: A panel analysis of German cities

Bart Neuts
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Bart Neuts: Auckland University of Technology, New Zealand

Tourism Economics, 2020, vol. 26, issue 3, 519-527

Abstract: Even though cities are among the most important tourist destinations, research on tourism as a vehicle for economic growth – most often approached via the tourism-led growth hypothesis (TLGH) – has predominantly been limited to countries. This study explores the validity of the TLGH in an urban context. Panel data were collected for 89 German cities on different indicators of urban economic growth. Pedroni panel cointegration confirmed a long-term equilibrium between tourism, local business tax revenue, income tax revenue and real GDP, indicating that even for cities within a strong, developed economy, tourism contributes to wealth creation. A Panel Granger causality analysis established a one-way Granger causal relationship from tourism to local business tax and income tax and a bidirectional relationship between tourism and real GDP. This causal relationship was stronger for cities with a high to medium tourism intensity.

Keywords: economic growth; German cities; panel analysis; tourism-led growth hypothesis; urban tourism (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:26:y:2020:i:3:p:519-527

DOI: 10.1177/1354816619833553

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