Do Tourism Receipts Contribute to the Sustainability of Current Account Deficits: a Case Study of Barbados

Lorde, Troy; Lowe, Shane; Francis, B.

doi:10.1002/jtr.1907

Cited by 17 publications

(9 citation statements)

References 16 publications

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“…Recently, there are a growing number of sources in literature about this causality, mostly in developing countries (Caldereon et al, 2002;Konan and Maskus, 2016). Lorde et al (2010) examined the case of Barbados, fi nding a positive impact. A positive relationships between tourism and growth and tourism contribution to balance of payment income has also been found for Turkey (Cetinas and Bektas, 2008;Arslantuk and Atan, 2012).…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Export of Travel Services on Current Account Balance and Growth in Mediterranean Countries

Baćović¹,

Jaćimović²,

Smolović³

2020

Prague Economic Papers

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Observing the expanding and high share of export of travel services in both GDP and total export of services in Mediterranean countries, we focus our research on travel service export in twelve countries from 1998 to 2018. We investigated both short-term and long-term significance of export of travel services for GDP growth in Mediterranean countries using the VAR and VECM model and the fixed-effects panel OLS model. In our analysis of significance of export of travel services on current account balance, we applied an accounting approach. Our application of the fixed-effects OLS model on the panel data with GDP growth rate as the dependent variable has shown that, in the short run, export of travel services has a positive impact on GDP growth. In the long run, Granger causality based on block exogeneity Wald tests evidenced that export of travel services has a positive impact on GDP growth, but only at the 10% significance level. Following the accounting approach in our analysis of impact of export of travel services on overall current account balance, we evidenced a strong relevance of export of travel services in achieving current account balance equilibrium.

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Section: Literature Reviewmentioning

confidence: 99%

Impact of Export of Travel Services on Current Account Balance and Growth in Mediterranean Countries

Baćović¹,

Jaćimović²,

Smolović³

2020

Prague Economic Papers

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“…Thus, tourism has emerged as the main source of foreign exchange, accounting for nearly 50% of foreign earnings on average. Further, current account deficits in Barbados would be unsustainable without the earnings from tourism (Lorde, Lowe, & Francis, 2010).…”

Section: Introductionmentioning

confidence: 99%

Evaluating the Impact of Crime on Tourism in Barbados: A Transfer Function Approach

Lorde¹,

Jackman²

2013

Tourism Analysis

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The impact of crime on tourism to Barbados was examined using a transfer function approach. results indicate that an increase in the overall crime rate has a negative and significant impact on arrivals to the island, and the fall-off is delayed, starting 6 months after a one-unit increase in the crime rate. The impulse response function shows that a 1% shock to crime reduces arrivals to Barbados, but takes about 20 months for arrivals to return to normalcy. This results in direct income losses of US$47,000 and indirect losses of US$108,000. Impacts for murder, assault with intent to rob, rape, and residential burglary rates were also investigated. Qualitatively, the results resemble those for the overall crime rate; however, the magnitudes of the impacts are greater and income losses are generally in the millions. Given the country's dependence on tourism receipts to sustain its current account, shocks to the crime rate can lead to balance of payment problems. Since there is a lag before the impact of increases in crime takes its full toll on arrivals, it is advised that at the first sign of heightened criminal activity policy makers should act to minimize losses.

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“…The explanation lies in the fact that tourism is a significant export driver in Croatia (Pavlic, Svilokos, & Tolic, 2015) and tourism exports can hardly be linked to imports. Similarly and based on the same inter-temporal budget approach, Lorde et al (2013) found that Barbados' current account deficits were weakly sustainable as a result of tourism's contribution and pointed out the island's dependence Table 2. Estimation results (state-space model with T.V.P) for the sustainability of international tradethe case of Serbia.…”

Section: Research Results and Discussionmentioning

confidence: 91%

Time-varying parameters approach to sustainability of international trade flows: the case of Croatia and Serbia compared

Bošnjak

2019

Economic Research-Ekonomska Istraživanja

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The empirical literature that relies on conventional cointegration approaches fails to support the existence of cointegration between exports and imports in some countries. This article moves a step ahead and contributes to existing literature to overcome the issue of the unexplained relationship between exports and imports. The research samples consist of quarterly data over the periods 2000q1-2017q2 and 2004q1-2017q2 for the Croatian and the Serbian cases, respectively. The results illustrated that the statespace model with time-varying parameters (T.V.P.) is well suited to establish the relationship between exports and imports when the standard cointegrating relationship does not hold.

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Do Tourism Receipts Contribute to the Sustainability of Current Account Deficits: a Case Study of Barbados

Cited by 17 publications

References 16 publications

Impact of Export of Travel Services on Current Account Balance and Growth in Mediterranean Countries

Impact of Export of Travel Services on Current Account Balance and Growth in Mediterranean Countries

Evaluating the Impact of Crime on Tourism in Barbados: A Transfer Function Approach

Time-varying parameters approach to sustainability of international trade flows: the case of Croatia and Serbia compared

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