The empirics of the tourism–growth nexus: how does tourism specialization affect regional growth paths?

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Abstract
This paper examines the link between tourism specialization and regional growth rates and factor accumulation. Based on convergence growth theory, we use a Bartik instrument to address the endogeneity of tourism intensity in explaining GDP per capita growth rates. Using data for Spanish provinces over the 2002–2018 period, we find that tourism positively affects regional economic growth. Nonetheless, there is evidence of an inverted-U relationship, indicating that the growth-enhancing effects of tourism diminish at high levels of overnight stays per capita. We also document relevant heterogeneity depending on the degree of specialization in international vs. domestic segments and tourism seasonality. Most notably, we show that tourism increases employment rates and both private and public capital stock per capita, but negatively affects human capital. Our findings highlight that tourism can be a driver of regional development, though its benefits are uneven and may come at the expense of long-term human capital accumulation.
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  • Gobierno del Principado de Asturias (IDE/2024/000712)
  • Gobierno del Principado de Asturias (IDE/2024/000697)

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