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Why Are Tourism Countries Small and Fast-Growing?

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  • A. Lanza
  • F. Pigliaru

Abstract

International tourism is today one of the most important tradable sectors, with expenditure on tourist goods and services representing some 8% of total world export receipts and 5% of world GDP. Cross-country data for 1985-95 on tourism specialisation and economic growth reveal the following regularities - (i) many tourism countries have grown faster compared to the other countries; and (ii) they are small. We use a two-sector endogenous growth model to obtain explanatory hypotheses about these two findings. In particular, we define the conditions required for small countries to specialise in tourism and to enter the faster growth path. Our suggestion is that what matters is a country's relative endowment of the natural resource, rather than its absolute size.

Suggested Citation

  • A. Lanza & F. Pigliaru, 1999. "Why Are Tourism Countries Small and Fast-Growing?," Working Paper CRENoS 199906, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    • Handle: RePEc:cns:cnscwp:199906
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    1. repec:cup:macdyn:v:3:y:1999:i:2:p:204-25 is not listed on IDEAS
    2. Marina Murat & Francesco Pigliaru, 1998. "International trade and uneven growth: a model with intersectoral spillovers of knowledge," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(2), pages 221-236.
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    5. M. Thea Sinclair, 1998. "Tourism and economic development: A survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(5), pages 1-51.
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