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Time-Varying Interdependencies of Tourism and Economic Growth: Evidence from European Countries

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  • Mina Dragouni
  • George Filis
  • Nikolaos Antonakakis

Abstract

In this study, we employ the novel measure of a VAR-based spillover index, developed by Diebold and Yilmaz (2012) to investigate the time-varying relationship between tourism and economic growth in selected European countries. Overall, the findings suggest that (i) the tourism-economy relationship is not stable over time in terms of both its magnitude and direction, (ii) the relationship exhibits patterns in its magnitude and/or direction during major economic events, such as the Great Recession of 2007 and the Eurozone debt crisis of 2010, and (iii) the impact of these economic events on the relationship between the tourism sector and the economy is more apparent to Cyprus, Greece, Portugal and Spain, which are the European countries that have experienced the most severe economic downturn since 2009. These results are important to tourism actors and policy makers, suggesting that they should pay particular attention to this time-varying relationship and the factors that influence it when designing their tourism strategies. In addition, the findings of this study carry significant implications for researchers, as they underline a strand of the literature which deserves further attention.

Suggested Citation

  • Mina Dragouni & George Filis & Nikolaos Antonakakis, 2013. "Time-Varying Interdependencies of Tourism and Economic Growth: Evidence from European Countries," FIW Working Paper series 128, FIW.
    • Handle: RePEc:wsr:wpaper:y:2013:i:128
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    References listed on IDEAS

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    Cited by:

    1. Aviral Kumar Tiwari & Muhammad Shahbaz & Haslifah M. Hasim & Mohamed M. Elheddad, 2019. "Analysing the spillover of inflation in selected Euro-area countries," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(3), pages 551-577, September.
    2. Bahman Huseynli, 2024. "The Effect of Tourism Revenues and Inflation on Economic Growth in Balkan Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 150-165.
    3. Aleksandra Hałka & Karol Szafranek, 2016. "Whose Inflation Is It Anyway? Inflation Spillovers Between the Euro Area and Small Open Economies," Eastern European Economics, Taylor & Francis Journals, vol. 54(2), pages 109-132, March.
    4. Chen, Liang & Guo, Yirong, 2023. "Revisiting resources extraction perspective in determining the tourism industry: Globalisation and human capital for next-11 economies," Resources Policy, Elsevier, vol. 85(PA).
    5. Tasos Stylianou, 2017. "The Contribution Of Tourism Development In Mediterranean Countries. A Dynamic Panel Data Approach," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 67(2), pages 85-100, April-Jun.
    6. Mustafa Özer & Inci Oya Coşkun & Mustafa Kırca, 2015. "Time Varying Causality Between Exchange Rates And Tourism Demand For Turkey," Tourism Research Institute, Journal of Tourism Research, vol. 10(1), pages 125-142, June.
    7. Tihana Škrinjarić, 2019. "Examining the Causal Relationship between Tourism and Economic Growth: Spillover Index Approach for Selected CEE and SEE Countries," Economies, MDPI, vol. 7(1), pages 1-19, March.
    8. Blanka Šimundić & Zvonimir Kuliš & Neven Šerić, 2016. "Tourism and economic growth: an evidence for Latin American and Carribean countries," Tourism and Hospitality Industry 34, University of Rijeka, Faculty of Tourism and Hospitality Management.

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    More about this item

    Keywords

    Tourism-Led Economic Growth; Economic-Driven Tourism Growth; Spillovers; Time-Varying Relationship; Variance Decomposition; European Countries;
    All these keywords.

    JEL classification:

    • 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
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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