Tourism and Growth in European Countries: An Application of Likelihood-Based Panel Cointegration

Felipa De Mello-Sampayo and Sofia de Sousa-Vale

No 2012/17, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: This paper applies likelihood-based panel cointegration techniques to examine the existence of a long run relationship between GDP, tourism earnings per tourist and total trade volume for a panel of European countries over the period 1988{2010. Removing the cross dependency, our panel tourism-led growth model indicates that tourism development has a higher impact on GDP in the North than in South European countries. The policy implication of this result is that for this group of countries, the best strategy is to raise tourism receipts. Furthermore, the volume of trade shows a signi cant and much more stronger e ect on the long run economic growth in our sample economies than tourism does. JEL Classi cation: F43; C33; L83

Keywords: Tourism; Economic growth; Rank tests; Panel unit root tests; Panel cointegration (search for similar items in EconPapers)
Date: 2012-05
New Economics Papers: this item is included in nep-fdg and nep-tur
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Citations: View citations in EconPapers (5)

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Working Paper: Tourism and Growth in European Countries: An Application of Likelihood-Based Panel Cointegration (2010)
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