Analysing the relationship between foreign real estate investment and tourism development

The real estate growth hypothesis in tourism destinations

“…Theoretical linkages aside, from an empirical viewpoint, the relationship between tourism growth and real estate development has been extensively analyzed for both developing and developed countries (Gopy-Ramdhany et al, 2021;Nguyen et al, 2021;Gascón & Milano, 2018;Fereidouni & Al-Mulali, 2014 ) in European countries and cities (Shoval, 2018;Sokhanvar, 2019), China (Tang et al, 2007;Zheng, 2022;Luo et al, 2016;Qian et al, 2012, Honggang et al, 2012Xu et al, 2012), France (Coëffé, & Stock, 2021;Fernández & Barrado, 2011), India (Selvanathan et al, 2009) or Mexico (González-Torreros et al, 2020).…”

“…Real estate provides various forms of accommodation for tourists, depending on the product in which the destination specializes. Once the industries start to become successful tourism and real estate development can interact with each other, promoting the growth of the destination through a mutually reinforcing mechanism (Fereidouni & Al-Mulali, 2014;Gopy-Ramdhany et al, 2021). Moreover, under even a partial operation of Say's Law, real estate development could precede or strongly drive the initial growth of the destination's own tourism growth.…”

“…Some studies (e.g., Tang et al, 2007or Selvanathan et al, 2009 focus on the relationship between total international direct investment (FDI) and tourism development. However, recently, the research has been studying the relationship by disaggregating residential direct investment (FRDI) from total direct investment (Gopy-Ramdhany et al, 2021).…”

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“…The link amongst FDI in real estate and the development of tourism is a modestly explored research topic (Fereidouni & Al-mulali, 2014;Ramdhany et al, 2021). The fact is that the tourism and real estate sectors are two components of the economy with high benefits and strong correlations in the tertiary sector (Sun & Fu, 2018).…”

“…Research to date has identified tourism as a very important factor influencing FDI in real estate (Gholipour & Masron, 2011;Gholipour, 2013;Hui & Chan, 2014;Rodríguez & Bustillo, 2010). Most research dealing with the causality issue found a causal relationship running from tourism to FDI in real estate (Gholipour et al, 2010), or a two-way causal relationship between these variables (Gholipour & Al-mulali, 2014;Gopy-Ramdhany et al, 2021). All of this mentioned research mainly focuses on the potential positive consequences of the causal relationship between tourism and FDI in real estate, ignoring negative aspects.…”