Tourism and economic growth: The role of institutional quality

Zhaoyang Sun, Ling Liu, Runquan Pan, Yiwei Wang and Bingbing Zhang

International Review of Economics & Finance, 2025, vol. 98, issue C

Abstract: Tourism serves as a vital catalyst for economic growth. However, the impact of tourism development on economic advancement is often debated, and insufficient attention has been paid to the role of institutional quality in this relationship. This paper aims to evaluate the extent to which institutional quality influences the contribution of tourism development to economic growth. The study employs Ordinary Least Squares (OLS), System Generalized Method of Moments (GMM), and Quantile regression on a dataset spanning 1998 to 2022 for 182 countries, facilitating robust inferences. The results from both absolute and growth models indicate that tourism positively contributes to economic growth, with this effect being moderated by the level of institutional quality. Subsampling tests reveal that countries with high institutional quality, like those exhibiting open tourism policies, experience significantly greater economic benefits from tourism development. This suggests that institutional quality plays a significant role in enhancing the capacity of tourism development to foster economic growth. Beyond yielding insights for practitioners into economic growth, our research contributes to the theories on the tourism economy and institutional quality.

Keywords: Economic growth; Tourism; Institutional quality; Moderating role (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056025000760
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:98:y:2025:i:c:s1059056025000760

DOI: 10.1016/j.iref.2025.103913

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().