Do geopolitical risks matter for inbound tourism?

Abstract

This paper aims to analyze the impact of geopolitical risks measured by a new index of geopolitical risk (GPR) on inbound tourism. For this purpose, we use the fixed-effects and the Least Squares Dummy Variable Corrected (LSDVC) estimations for panel data of 18 countries for the period from 1995 to 2016. We find that geopolitical risks negatively affect inbound tourism. We also implement various robustness checks, such as introducing control variables, considering the lagged effect of the GPR, and utilizing different econometric techniques.

How pandemics affect tourism: International evidence

“…The exchange rate has a positive effect on tourist arrivals. Those findings are in line with the previous studies ( Demir et al, 2019 ). Trade openness has a positive effect on tourist arrivals implying that integration with the world helps countries to attract more tourists.…”

“…The index is comparable across countries and can be used in a panel data format. 1 We use the following demand model ( Demir et al, 2019 ; Santana-Gallego et al, 2020 ); where LnITA i , t and LnITA i , t −1 is the natural logarithm of tourist arrivals at time t and t-1 for country i, respectively; LnPI i , t is the natural logarithm of the Pandemics Index; LnGDPPC i , t is the natural logarithm of GDP (Gross Domestic Product) per capita; LnOPEN i , t is the natural logarithm of ratio of sum of exports & imports to GDP; LnEXH i , t is the natural logarithm of domestic currency per $. Year fixed effects ( λ t ) are included to control for trends and common shocks to countries.…”

The Impact of Geopolitical Risks on Tourism Supply in Developing Economies: The Moderating Role of Social Globalization

“…Moreover, lending interest rates are negatively associated with the CITT since a lower interest rate makes capital cheaper. These results for the control variables are also in line with previous studies, such as Demir, Gozgor, and Paramati (2019).…”

The causal nexus of geopolitical risks, consumer and producer confidence indexes: evidence from selected economies

“…Furthermore, Demir et al ( 2019 ) researched the relationship between geopolitical risk index and tourism indicator by employing the GMM method. They used the data of 18 countries and expressed that geopolitical risks negatively affect the number of tourists.…”