| Abstract: |
Over the past two decades, tourism exports have been a major driver of
economic growth in many emerging and developing countries. Yet, increased
tourism revenues do not automatically translate into structural transformation
and broad-based economic development. Drawing on cross-sectional data, this
paper gauges the extent to which tourism has contributed to economic
diversification in a large sample of developing countries. An econometric
model is used to assess the relative importance of a country’s natural
endowments, level of development, institutional maturity, business
environment, and trade regulations in explaining cross-country differences in
linkages between tourism and the general economy. The central findings contain
encouraging lessons for developing countries: domains that are more amenable
to policy interventions in the short term, such as the business environment or
trade regulations, matter most in fostering productive linkages between
tourism and the general economy. In contrast, fixed factors, such as land
availability, or longer-terms goals, such as advances in the level of
development, have less influence. |