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Does Tourism Promote Cross-Border Trade?

Satheesh Aradhyula and Russell Tronstad

American Journal of Agricultural Economics, 2003, vol. 85, issue 3, 569-579

Abstract: We estimate a simultaneous bivariate qualitative choice model of Arizona agribusiness firms' propensity to trade and visit as a tourist the cross-border state of Sonora, Mexico. Venture business visits, quantified through the tourism equation, were found to have the largest impact on a firm's propensity to trade. Tourist visits have a greater impact on trade when combined with other firm attributes such as age, perceived need for geographic diversity, foreign language fluency, and firm size, than if considered alone. Our results suggest that there is a role for government agencies to play in overcoming imperfect information related to trade opportunities through facilitating exploratory business venture and tourist visits. Copyright 2003, Oxford University Press.

Date: 2003
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Handle: RePEc:oup:ajagec:v:85:y:2003:i:3:p:569-579