International Tourism, development and Biodiversity: First Evidence

We analyse whether biodiversity can improve the economic growth of Least Developed Countries (LDCs) by increasing the receipts of tourism as one of the world biggest and fastest growing industries. The intention of our examination is to present an alternative utilization of biodiversity, rather than hunting or the agricultural use of habitats. Our hypothesis is that tourism may be an important chance for economic growth in developing countries. We assume that biodiversity is an important factor influencing the demand for tourism. In other words: a rich biodiversity provides a comparative advantage for most LDCs. Using by a simple growth-model, we conclude that only sustainable tourism shows a steady economic growth in the long run, which may result in an economic convergence from LDCs to Developed Countries. The model is supported by an empirical analysis. We assess the determinants of trade in tourism and comparative advantage therein based on cross-country data of incidence and the rate of endangerment of birds, as the probably best explored taxonomic group. Other exogenous variables are GDP per capita, life expectancy (as determinates for safety and infrastructure), coastline, the distance to the equator and the number of UNESCO-World-Heritage sites. The main findings are that LDCs first seem to have a comparative advantage in (sustainable) tourism, that second incidence of birds has a positive impact on inbound tourism receipts per capita, and that third the rate of endangered to total birds is negatively influencing tourism receipts.