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Travel Channel Meets Discovery Channel or How Tourism Can Encourage Better Export Performance and Diversification in Nepal

Author

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  • Jose Guilherme Reis
  • Gonzalo Varela

Abstract

Entering and surviving in export markets is a costly process that involves learning about the existence of foreign demand, ‘discovering’ production costs, building up reputation, succeeding in product branding to reduce competitive pressures and to upgrade quality to serve demanding international clients, and remaining competitive in the marketplace. This article argues that tourism alleviates some of these costs by providing an inexpensive platform for cost discovery and by acting as an accessible ‘in-house’ trade fair for domestic producers. It combines product-level data on world and Nepal’s exports with Nepalese data on tourist inflows, and macro-indicators on relative prices. For tourism-related goods, it reveals a positive association between tourist inflows from given destinations with future merchandise exports to those destinations, while no association is found for goods unrelated to tourism. The results suggest spillovers from tourism into merchandise export performance and diversification and gains from cooperation between tourism and export promotion.

Suggested Citation

  • Jose Guilherme Reis & Gonzalo Varela, 2015. "Travel Channel Meets Discovery Channel or How Tourism Can Encourage Better Export Performance and Diversification in Nepal," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 16(2), pages 183-208, September.
    • Handle: RePEc:sae:soueco:v:16:y:2015:i:2:p:183-208
    DOI: 10.1177/1391561415598454
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    References listed on IDEAS

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    Cited by:

    1. Claire H. Hollweg, 2016. "From Evidence to Policy Supporting Nepal’s Trade Integration Strategy," World Bank Publications - Reports 24932, The World Bank Group.
    2. Laura Gomez Mera, 2016. "From Evidence to Policy Supporting Nepal’s Trade Integration Strategy," World Bank Publications - Reports 24933, The World Bank Group.
    3. Honeck, Dale & Akhtar, Md. Shoaib, 2014. "Achieving Bangladesh's tourism potential: Linkages to export diversification, employment generation and the "green economy"," WTO Staff Working Papers ERSD-2014-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. Reis, José Guilherme & Varela, Gonzalo, 2013. "Can Tourism Encourage Better Export Performance and Diversification in Nepal?," World Bank - Economic Premise, The World Bank, issue 127, pages 1-6, October.
    5. World Bank Group, 2016. "From Evidence to Policy," World Bank Publications - Reports 24979, The World Bank Group.

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    More about this item

    Keywords

    export performance; diversification; panel data; trade fairs;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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