The Impact of Wage Rate Growth on Tourism Competitiveness

Kahlil Philander and Susan J. Roe
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Kahlil Philander: University of Nevada, Las Vegas, 4505 Maryland Parkway, Box 456017, Las Vegas, NV 89154–6107, USA
Susan J. Roe: Department of Hospitality and Tourism Management, College of Business, San Francisco State University, 1600 Holloway Avenue, San Francisco, CA 94132, USA

Tourism Economics, 2013, vol. 19, issue 4, 823-834

Abstract: This study tests whether national labour costs affect international competitiveness in the tourism industry. Using a fixed effect model design and two-stage least squares (2SLS) estimation, a set of 40 countries is examined during the period 1990–2010. The study reveals that labour costs may be an important supply-side determinant of tourism expenditures, and supports the hypothesis of a negative relationship between these two variables. Implications of the reported findings for industry and for government macroeconomic policy are provided. Potential extensions of these findings to the tourism area life cycle model are also discussed.

Keywords: tourism competitiveness; wages; labour costs; instrumental variable; visitor expenditures (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:19:y:2013:i:4:p:823-834

DOI: 10.5367/te.2013.0226

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