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Tourism and economic development: The beach disease?

2010; Elsevier BV; Volume: 32; Issue: 4 Linguagem: Inglês

10.1016/j.tourman.2010.08.007

1879-3193

Mario Holzner,

Natural Resources and Economic Development

This paper analyses empirically the danger of a Dutch Disease Effect in tourism dependent countries in the long run. Data on 134 countries of the world over the period 1970–2007 is used. In a first step the long-run relationship between tourism and economic growth is analysed in a cross-country setting. The results are then checked in a panel data framework on GDP per capita levels that allows to control for reverse causality, non-linearity and interactive effects. It is found that there is no danger of a Beach Disease Effect. On the contrary, tourism dependent countries do not face real exchange rate distortion and deindustrialisation but higher than average economic growth rates. Investment in physical capital, such as for instance transport infrastructure, is complementary to investment in tourism.