What are the factors that influence the level of tourism development? : Research based on 130 countries

University essay from Uppsala universitet/Institutionen för samhällsbyggnad och industriell teknik

Abstract: This study is based on data regarding the social, economic, and demographic characteristics of 130 countries, and uses fixed effects estimation for the model analysis. It demonstrates that tourism development represents a complex process, which requires the implication of a multitude of stakeholders. Macroeconomic factors, such as GDP per capita growth and economic openness, are having a positive impact because they benefit private ownership and motivate people to open tourism-related businesses. Overall, higher carbon dioxide emissions and worse safety are having a negative effect over tourism development. Human development factors, such as education, are generally beneficial to the long-term tourism growth because they serve as positive externalities. Clustering the initial dataset based on various economic, demographic and social factors brought several new conclusions. Particularly, GDP per capita growth is not an important tourism development factor among developed countries, whereas the dummy variable for the year 2010 is a substantial one. Education and economic freedom are particularly important regressors for post-socialist states. The former is also crucial among African countries and in the Latin American region, where safety has also an essential impact over tourism development. Finally, tourism in small states would benefit the most from lower emissions,whereas in big states the best strategy for the policymaker would be to increase safety measures. 

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