Empirical Economics

, 41:533 | Cite as

Tourism and trade in OECD countries. A dynamic heterogeneous panel data analysis

  • María Santana-Gallego
  • Francisco Ledesma-Rodríguez
  • Jorge V. Pérez-Rodríguez
Article

Abstract

This article studies the empirical link between international tourism and trade. We apply dynamic heterogeneous panel data techniques to analyse both long and short-run relationship for the case study of OECD countries. This link is studied by estimating the cointegration vector and analysing the short causality between variables. The analysis recognises that inbound tourism can promote international trade and also that international flow of goods requires and may encourage tourist arrivals and departures. The statistical significance of this link supports the presence of business opportunities due to the potential complementary relationship between tourism and trade. The results suggest a short-run nexus between tourism and trade, and that these variables are cointegrated.

Keywords

Tourism flows International trade Cointegration Causality Panel data 

JEL Classification

F10 L83 C33 

References

  1. Ahmed J, Kwan ACC (1991) Causality between exports and economic growth. Econ Lett 37: 243–248CrossRefGoogle Scholar
  2. Aradhyula S, Tronstad R (2003) Does tourism promote cross-border trade?. Am J Agric Econ 85(3): 569–579CrossRefGoogle Scholar
  3. Bai J, Ng S (2002) Determining the number of factors in approximate factor models. Econometrica 70(19): 191–221CrossRefGoogle Scholar
  4. Bai J, Ng S (2004) A PANIC attack on unit roots and cointegration. Econometrica 72(4): 127–1177CrossRefGoogle Scholar
  5. Balaguer J, Cantavella-Jordá M (2002) Tourism as a long-run economic growth factor: the Spanish case. Appl Econ 34: 877–884CrossRefGoogle Scholar
  6. Breitung J (2000) The local power of some unit root tests for panel data. In: Baltagi B (eds) Advances in Econometrics: nonstationary panels panel cointegration and dynamic panels, vol 15. JAI Press, Amsterdam, pp 161–178CrossRefGoogle Scholar
  7. Breitung J, Pesaran MH (2008) Unit roots and cointegration in panels. In: Matyas L, Sevestre P (eds) The Econometrics of panel data, 3rd edn. Kluwer Academic Publishers, Dordrecht, pp 279–322CrossRefGoogle Scholar
  8. Choi I (2001) Unit root tests for panel data. J Int Money Finance 20: 249–272CrossRefGoogle Scholar
  9. Chul H, Muzaffer U, Weaver PA (1995) Product bundles and market segments based on travel motivations: a canonical correlation approach. Int J Hosp Manag 14(2): 123–137CrossRefGoogle Scholar
  10. Corradi V, Galleotti M, Rovelli R (1990) A cointegration analysis of the relationship between bank reserves deposits and loans: the case of Italy 1965–1987. J Banking Finance 14: 199–214CrossRefGoogle Scholar
  11. Easton ST (1998) Is tourism just another commodity? Links between commodity trade and tourism. J Econ Integr 13: 522–543Google Scholar
  12. Eilat Y, Einav L (2004) Determinants of international tourism: a three-dimensional panel data analysis. Appl Econ 36: 1315–1327CrossRefGoogle Scholar
  13. Engle RF, Granger CWJ (1987) Co-integration and error correction: representation estimation and testing. Econometrica 55: 251–276CrossRefGoogle Scholar
  14. Fischer C, Gil-Alana LA (2005) The nature of the relationship between international tourism and international trade: the case of German imports of Spanish wine. Working paper 15/05, School of Economics and Business Administration University of NavarraGoogle Scholar
  15. Funk M, Strauss F (2000) The long-run relationship between productivity and capital. Econ Lett 69(2): 213–217CrossRefGoogle Scholar
  16. Goh C, Law R (2003) Incorporating the rough sets theory into travel demand analysis. Tour Manag 24(5): 511–517CrossRefGoogle Scholar
  17. Granger CWJ (1981) Some properties of time series data and their use in econometric model specification. Journal of Econometrics 16: 121–130CrossRefGoogle Scholar
  18. Hadri K (2000) Testing for stationarity in heterogeneous panel data. Econ J 3: 148–161Google Scholar
  19. Im K, Pesaran H, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econom 115: 53–74CrossRefGoogle Scholar
  20. Jin CJ (1995) Export-led growth and the four little dragons. The Journal of International Trade and Economic Development 4: 203–215CrossRefGoogle Scholar
  21. Kao C (1999) Spurious regression and residual-based tests for cointegration in panel data. J Econom 90: 1–44CrossRefGoogle Scholar
  22. Kao C, Chiang M (2000) On the estimation and inference of a cointegrated regression in panel data. In: Baltagi B (eds) Nonstationary panels panel cointegration and dynamic panels. Advances in Econometrics, vol 15. Elsevier Science, Amsterdam, pp 179–222CrossRefGoogle Scholar
  23. Khan H, Toh RS, Chua L (2005) Tourism and trade: cointegration and Granger causality tests. J Travel Res 44: 171–176CrossRefGoogle Scholar
  24. Kulendran N, Wilson K (2000) Is there a relationship between international trade and international travel. Appl Econ 32: 1001–1009CrossRefGoogle Scholar
  25. Kwan ACC, Cotsomotis J (1991) Economic growth and the expanding export sector: China 1952–1985. Int Econ Rev 5: 105–117Google Scholar
  26. Ledesma FJ, Navarro V, Pérez JV (2001) Panel data and tourism demand: a case study of Tenerife. Tour Econ 7(1): 75–88CrossRefGoogle Scholar
  27. Ledesma FJ, Navarro M, Pérez JV (2005) Return to tourist destinations. Is it reputation after all?. Appl Econ 37: 2055–2065CrossRefGoogle Scholar
  28. Lee C, Chang C (2008) Tourism development and economic growth: a closer look at panels. Tour Manag 29(1): 180–192CrossRefGoogle Scholar
  29. Levin A, Lin CF, Chu C (2002) Unit root tests in panel data: asymptotic and finite-sample properties. J Econom 108: 1–24CrossRefGoogle Scholar
  30. Lim C (1997) An econometric classification and review of international tourism demand Models. Tour Econ 3: 69–81Google Scholar
  31. Maddala GS, Wu S (1999) A comparative study of unit root tests with panel data and a new simple test. Oxf Bull Econ Stat 61: 631–652CrossRefGoogle Scholar
  32. Maeso-Fernández F, Osbat C, Schnatz B (2004) Towards the estimation of equilibrium exchange rates for CEE acceding countries: methodological issues and a panel cointegration perspective. ECB Working Paper 353 Frankfurt am MainGoogle Scholar
  33. Marin D (1992) Is the export-led growth hypothesis valid for industrialized countries. Rev Econ Stat 74: 678–688CrossRefGoogle Scholar
  34. Moon HR, Perron B (2004) Testing for a unit root in panels with dynamic factors. J Econom 122(1): 81–126CrossRefGoogle Scholar
  35. Nowak JJ, Sahli M, Cortes-Jiménez I (2007) Tourism capital good imports and economic growth theory and evidence for Spain. Tour Econ 13(4): 515–536CrossRefGoogle Scholar
  36. Oh C (2005) The contribution of tourism development to economic growth in the Korean economy. Tour Manag 26: 39–44CrossRefGoogle Scholar
  37. Pedroni P (1996) Fully Modified OLS for heterogeneous cointegrated panels and the case of Purchasing Power Parity. Indiana University working papers in economics 96-020 (June)Google Scholar
  38. Pedroni P (1999) Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxf Bull Econ Stat 61: 653–670CrossRefGoogle Scholar
  39. Pedroni P (2000) Fully-modified OLS for heterogeneous cointegrated panels. In: Baltagi B (eds) Nonstationary panels panel cointegration and dynamic panels. Advances in Econometrics, vol 15. Elsevier Science, Amsterdam, pp 93–130CrossRefGoogle Scholar
  40. Pedroni P (2004) Panel cointegration; asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econom Theory 20: 597–625CrossRefGoogle Scholar
  41. Pesaran MH, Smith R, Shin Y (1999) Pooled mean group estimation of dynamic heterogeneous panels. J Am Stat Assoc 94: 621–634CrossRefGoogle Scholar
  42. Santana M, Ledesma FJ, Pérez JV (2010a) On the relationships between trade and tourism. In: The economics of sustainable tourism, routledge critical studies in tourism, business and management. Routledge, pp 92–107Google Scholar
  43. Santana M, Ledesma FJ, Pérez JV (2010b) Exchange rate regimes and tourism. Tour Econ 16(1): 25–43CrossRefGoogle Scholar
  44. Shan J, Wilson K (2001) Causality between trade and tourism: empirical evidence from China. Appl Econ Lett 8: 279–283CrossRefGoogle Scholar
  45. Sims C, Stock H, Watson M (1990) Inference in linear time series models with some unit root. Econometrica 58: 113–145CrossRefGoogle Scholar
  46. Thornton J (1997) Exports and economic growth: evidence from 19th century Europe. Econ Lett 55: 235–240CrossRefGoogle Scholar
  47. Turner LW, Witt SF (2001) Factors influencing demand for international tourism: tourism demand analysis using structural equation modelling revisited. Tour Econ 7(1): 21–38CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  • María Santana-Gallego
    • 1
  • Francisco Ledesma-Rodríguez
    • 1
  • Jorge V. Pérez-Rodríguez
    • 2
  1. 1.Facultad de Ciencias Económicas y EmpresarialesUniversity of La LagunaLa Laguna (Tenerife)Spain
  2. 2.Facultad de Ciencias Económicas y EmpresarialesUniversity of Las Palmas de Gran CanariaLas Palmas (Gran Canaria)Spain

Personalised recommendations