How Strong is the Linkage between Tourism and Economic Growth in Europe?

Antonakakis, Nikolaos ORCID: and Dragouni, Mina and Filis, George (2015) How Strong is the Linkage between Tourism and Economic Growth in Europe? Economic Modelling, 44. pp. 142-155. ISSN 0264-9993


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In this study, we examine the dynamic relationship between tourism growth and economic growth, using a newly introduced spillover index approach. Based on monthly data for 10 European countries over the period 1995-2012, our analysis reveals the following empirical regularities. First, the tourism-economic growth relationship is not stable over time in terms of both magnitude and direction, indicating that the tourism-led economic growth (TLEG) and the economic-driven tourism growth (EDTG) hypotheses are time-dependent. Second, the aforementioned relationship is also highly economic event-dependent, as it is influenced by the Great Recession of 2007 and the ongoing Eurozone debt crisis that began in 2010. Finally, the impact of these economic events is more pronounced in Cyprus, Greece, Portugal and Spain, which are the European countries that have witnessed the greatest economic downturn since 2009. Plausible explanations of these results are provided and policy implications are drawn.

Item Type: Article
Additional Information: To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription.
Keywords: Tourism-led economic growth / Economic-driven tourism growth / Spillover / Time-varying relationship / Variance decomposition / Europe
Divisions: Departments > Volkswirtschaft > Internationale Wirtschaft
Version of the Document: Draft
Variance from Published Version: Typographical
Depositing User: Nikolaos Antonakakis
Date Deposited: 09 Dec 2014 13:08
Last Modified: 09 Sep 2020 06:13
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