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An R&D-Based Endogenous Growth Model of International Tourism

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  • Isabel P. Albaladejo
  • María Pilar Martínez-García

Abstract

According to the tourism area life cycle (TALC) model of Butler (1980), the evolution of a touristic destination follows an S-shaped curve which is upper-bounded by its carrying capacity, usually assumed to be a fixed constant. This forecast prevents a tourism-based economy from maintaining positive growth rates in the long run. However, infrastructures, transportation networks, accommodation facilities and the variety of attractions can be broadened to increase the tourism carrying capacity. In this paper, innovation is the motor of carrying capacity growth. The model follows the tradition of R&D-based endogenous growth models and allows the long-run sustainability of economic growth in a tourism-specialized economy. Along a balanced growth path, the income from tourism grows at the same rate as the innovation, and the carrying capacity will grow as the rate of innovation surpasses the foreign economic growth rate. The long-term growth of the economy depends on the real exchange rate.

Suggested Citation

  • Isabel P. Albaladejo & María Pilar Martínez-García, 2015. "An R&D-Based Endogenous Growth Model of International Tourism," Tourism Economics, , vol. 21(4), pages 701-719, August.
    • Handle: RePEc:sae:toueco:v:21:y:2015:i:4:p:701-719
    DOI: 10.5367/te.2014.0379
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    References listed on IDEAS

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    2. Srdelić, Leonarda & Dávila-Fernández, Marwil J., 2024. "International trade and economic growth in Croatia," Structural Change and Economic Dynamics, Elsevier, vol. 68(C), pages 240-258.
    3. Hamaguchi, Yoshihiro, 2021. "Does the trade of aviation emission permits lead to tourism-led growth and sustainable tourism?," Transport Policy, Elsevier, vol. 105(C), pages 181-192.
    4. 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).
    5. Beata Gavurova & Jaroslav Belas & Katarina Zvarikova & Martin Rigelsky & Viera Ivankova, 2021. "The Effect of Education and R&D on Tourism Spending in OECD Countries: An Empirical Study," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 23(58), pages 806-806, August.
    6. Henrekson, Magnus & Johansson, Dan & Karlsson, Johan, 2021. "To Be or Not to Be: The Entrepreneur in Endogenous Growth Theory," Working Papers 2021:3, Örebro University, School of Business.

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