The Institutional Impact On Touristic Industry In Southern European Union Countries

The tourism industry in Southern European Union (EU) countries is a critical economic sector, significantly contributing to GDP and employment. This paper investigates the role of institutional factors in shaping the tourism industry in these regions, examining how governance, regulatory frameworks, and policy measures influence tourism development. The study focuses on evaluating the institutional impact on tourism through qualitative and quantitative analyses. The findings underscore the importance of effective governance and robust institutional frameworks in fostering a resilient and competitive tourism sector. This research explores the impact of institutional quality on tourism development in a panel of southern countries within the European Union over the period. Tourism development is evaluated using the number of tourist arrivals, with control variables such as GDP growth rate, inflation, higher education, quality of the environment, and trade, representing key determinants of tourism. Institutional quality is gauged using indicators of government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability. The study utilizes the Fully Modified Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Squares (DOLS) estimators to assess the influence of these determinants on tourism development. The findings demonstrate a positive correlation between institutional quality and tourism, providing valuable insights into the role of institutions in tourism management and their impact on the sector.