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Tourism and Economic Development: Evidence from Mexico's Coastline

Benjamin Faber and Cécile Gaubert

No 12644, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Tourism is a fast-growing services sector in developing countries. This paper combines a rich collection of Mexican microdata with a quantitative spatial equilibrium model and a new em- pirical strategy to study the long-term economic consequences of tourism both locally and in the aggregate. We find that tourism causes large and significant local economic gains relative to less touristic regions that are in part driven by significant positive spillovers on manufacturing. In the aggregate, however, these local spillovers are largely offset by reductions in agglomeration economies among less touristic regions, so that the national gains from trade in tourism are mainly driven by a classical market integration effect.

Keywords: economic development; Gains from trade; spatial equilibrium; Tourism (search for similar items in EconPapers)
JEL-codes: F15 F63 O24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-tur and nep-ure
Date: 2018-01
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