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The Tourism-led Economic Growth Hypothesis in the Euro Area: Do Asymmetries and Structural Breaks Matter?

Author

Listed:
  • Dimitrios Bakas

    (Nottingham Business School, Nottingham Trent University (UK) and Rimini Centre for Economic Analysis (RCEA) (USA))

  • Ioanna Konstantakopoulou

    (Centre for Planning and Economic Research (Greece))

  • Athanasios Triantafyllou

    (IESEG School of Management, Univ. Lille (France))

Abstract

This paper examines the validity of the tourism-led economic growth hypothesis for the Euro Area economies. We employ linear and nonlinear autoregressive distributed lag cointegration approaches to examine the symmetric and asymmetric effects of tourism on economic growth. Furthermore, we control for the presence of structural breaks in the time series which account for the recent financial and debt crises in the Euro Area. The results support the positive impact of tourism on economic growth for most of the Euro Area economies and are robust to alternative tourism measures. The findings indicate that an asymmetric impact exists both in the long and the short run. Positive and negative shocks of tourism and real exchange rate result to very different effects, in the sign and magnitude, on economic growth.

Suggested Citation

  • Dimitrios Bakas & Ioanna Konstantakopoulou & Athanasios Triantafyllou, 2024. "The Tourism-led Economic Growth Hypothesis in the Euro Area: Do Asymmetries and Structural Breaks Matter?," Working Papers 20, SITES.
    • Handle: RePEc:awm:wpaper:20
    Note: SITES Working Papers 20
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    More about this item

    Keywords

    Tourism-Led Growth Hypothesis; Euro Area; ARDL; Nonlinear ARDL; Structural Breaks;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F00 - International Economics - - General - - - General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Z32 - Other Special Topics - - Tourism Economics - - - Tourism and Development

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