Impact of Inbound Tourism on Regional Economic Development: Evidence from Japanese commuting zone-level data

Toshiyuki Matsuura, Masahiro Endoh and Hisamitsu Saito

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This study investigates the regional economic consequences of tourism expansion, conceptualizing it as a positive demand shock to the local tradable service sector. While traditional regional development strategies emphasize manufacturing exports, we examine how inbound tourism, a growing form of service trade, can promote regional revitalization. Focusing on the rapid increase in inbound tourists to Japan during the 2010s, we employ a shift-share instrumental variable approach using a novel commuting zone-level dataset to identify causal effects. By disentangling the impacts of international and domestic tourists, we identify the distinct effects of inbound tourism on key regional economic indicators: per capita income, youth demographic shifts, and commercial land prices. These gains are spatially concentrated and moderated by regional heterogeneity, with leisure-oriented and seasonal destinations experiencing more pronounced growth. Our findings suggest that strategic promotion of foreign tourism can effectively mitigate regional decline by optimizing resource utilization and population dynamics.

Pages: 47 pages
Date: 2026-03
New Economics Papers: this item is included in nep-sea, nep-tur and nep-uep
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/26e020.pdf (application/pdf)

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:eti:dpaper:26020

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().