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Tourism Resource Development and Long-Term Economic Growth: A Resource Curse Hypothesis Approach

Author

Listed:
  • Taotao Deng

    (School of Urban and Regional Science, Shanghai University of Finance and Economics, No 777 Guoding Road, Shanghai 200433, China)

  • Mulan Ma

    (School of Tourism and Event Management, Shanghai University of International Business and Economics, No 1900 Wenxiang Road, Shanghai, 201620, China)

  • Jianhua Cao

    (School of Urban and Regional Science, Shanghai University of Finance and Economics, No 777 Guoding Road, Shanghai 200433, China)

Abstract

The paper proposes a resource curse hypothesis approach to analyse the instability of tourism-led growth. Using panel data on China's 30 provinces over the period 1987–2010, this study examines the direct and indirect effects of tourism on long-term economic growth. Four transmission channels widely held in the resource curse hypothesis are applied in the tourism industry: Dutch disease effect, crowding-out effect, deterioration of institutional quality and volatility of resource trade. The empirical results show that even in the non-tourism-dependent economies there is a possibility that the tourism resource curse will occur in the long term. Tourism resource development tends to reduce economic growth, mainly through crowding out human capital. A tourism boom seems to have a crowding-out effect on industrial production; however, the effect is small and insignificant in the large non-tourism-dependent economies. The physical investment channel is identified as the most important positive transmission channel through which tourism activity exerts more influence on growth.

Suggested Citation

  • Taotao Deng & Mulan Ma & Jianhua Cao, 2014. "Tourism Resource Development and Long-Term Economic Growth: A Resource Curse Hypothesis Approach," Tourism Economics, , vol. 20(5), pages 923-938, October.
    • Handle: RePEc:sae:toueco:v:20:y:2014:i:5:p:923-938
    DOI: 10.5367/te.2013.0325
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    References listed on IDEAS

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    1. Taotao Deng & Mulan Ma & Shuai Shao, 2014. "Research Note: Has International Tourism Promoted Economic Growth in China? A Panel Threshold Regression Approach," Tourism Economics, , vol. 20(4), pages 911-917, August.
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    2. Abdul Rahim Ridzuan & Mohd Shahidan Shaari & Anita Rosli & Abdul Rahim Md Jamil & Siswantini Siswantini & Arsiyanti Lestari & Shahsuzan Zakaria, 2021. "The Nexus between Economic Growth and Natural Resource Abundance in Selected ASEAN countries before Pandemic Covid-19," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 281-292.
    3. Sinha, Avik & Sengupta, Tuhin, 2019. "Impact of natural resource rents on human development: What is the role of globalization in Asia Pacific countries?," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    4. Taotao Deng & Mulan Ma, 2016. "Booming tourism industry and urban economic growth," Tourism Economics, , vol. 22(5), pages 1161-1168, October.
    5. Mulan Ma & Weishu Zhao & Guanxu Wan & Taotao Deng & Yi Yang, 2023. "Specialization versus diversity: The role of city size in tourist cities," Tourism Economics, , vol. 29(8), pages 2081-2102, December.
    6. Ngassam, Sylvain B. & Asongu, Simplice A. & Ngueuleweu, Gildas Tiwang, 2024. "A revisit of the natural resource curse in the tourism industry," Resources Policy, Elsevier, vol. 88(C).
    7. Shahzad, Syed Jawad Hussain & Shahbaz, Muhammad & Ferrer, Román & Kumar, Ronald Ravinesh, 2017. "Tourism-led growth hypothesis in the top ten tourist destinations: New evidence using the quantile-on-quantile approach," Tourism Management, Elsevier, vol. 60(C), pages 223-232.
    8. Chaoqun Chen & Yonghong Zhou, 2021. "Institutional endowment, curse, and the impact of external political shock: The case of Macao," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2433-2453, November.
    9. Xiuying Ma & Yongjing Wang & Haiyan Song & Han Liu, 2020. "Time-varying mechanisms between foreign direct investment and tourism development under the new normal in China," Tourism Economics, , vol. 26(2), pages 324-343, March.
    10. Roberto Balado-Naves & David Boto-García & José Francisco Baños-Pino, 2024. "A multisector growth model for testing the Tourism-Led Growth versus the Beach Disease hypotheses," Efficiency Series Papers 2024/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    11. Chu, Angus C. & Liao, Chih-Hsing & Xu, Rongxin & Chen, Ping-Ho, 2024. "Dynamic effects of tourism shocks on innovation in an open-economy Schumpeterian growth model," Economic Modelling, Elsevier, vol. 131(C).
    12. Simone Marsiglio, 2017. "On the carrying capacity and the optimal number of visitors in tourism destinations," Tourism Economics, , vol. 23(3), pages 632-646, May.
    13. Nesrin Tuncay & Ceyhun Can Özcan, 2020. "The effect of Dutch disease in the tourism sector: the case of Mediterranean countries," Tourism and Hospitality Management, University of Rijeka, Faculty of Tourism and Hospitality Management, vol. 26(1), pages 97-114, June.
    14. Abdelmohsen A. Nassani & Khalid Zaman & Abdullah Mohammed Aldakhil & Muhammad Moinuddin Qazi Abro, 2017. "War economy and pleasure: assessing the effects of military expenditure on tourism growth," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(4), pages 1733-1754, July.
    15. Hui Hu & Weijun Ran & Yuchen Wei & Xiang Li, 2020. "Do Energy Resource Curse and Heterogeneous Curse Exist in Provinces? Evidence from China," Energies, MDPI, vol. 13(17), pages 1-26, August.
    16. Chien-Ming Wang & Tsung-Pao Wu, 2022. "Does tourism promote or reduce environmental pollution? Evidence from major tourist arrival countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 3334-3355, March.
    17. Cheng Peng & Dianzhuang Feng & Hai Long, 2022. "Assessing the Contribution of Natural Gas Exploitation to the Local Economic Growth in China," Energies, MDPI, vol. 15(16), pages 1-17, August.
    18. Li, Guangqin & Pu, Kangyun & Long, Minghui, 2023. "High-speed rail connectivity, space-time distance compression, and trans-regional tourism flows: Evidence from China's inbound tourism," Journal of Transport Geography, Elsevier, vol. 109(C).
    19. Ting Xu & Zhike Lv, 2023. "The effect of tourism on the shadow economy: The level of economic development is key," Tourism Economics, , vol. 29(8), pages 2129-2142, December.

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