Terrorism and International Tourism: New Evidence

Abstract

This paper analyses the impact of terrorist activity on international tourist flows. To this end, we have estimated a cross-sectional gravity equation for tourism from the G-7 countries to a sample of 134 destinations over the period 2001-2003. Within this framework, we evaluate the deviation from 'normal' tourist flows due to terrorist activity, which is considered as negative advertising for the affected country. The analysis suggests that both domestic victims and international attacks are relevant factors when foreign tourists make their choice. This result is robust under alternative specifications. Moreover, the impact of terrorism is more severe in developing countries.Domestic terrorism, International terrorism, Gravity model, Negative advertising, Tourist flows,

Who has terror angst? Perceptions of the effects of terror on the world economy

“…Enders and Sandler (1996) show a marked decline of FDI in Greece (-14%) and Spain (-12 %) as a consequence of terror; Bandyopadhyay et al (2013) demonstrate the sizeable and significantly negative effect of terror on FDI for a panel of 78 countries for the period 1984-2008, Filer and Stanišić (2016 support this finding in their panel analysis of 160 countries . A second example is the steep decline in tourist inflows after terror has hit a country (Enders et al 1992, Neumayer 2004, Llorca-Vivero 2008. Neumayer (2004) shows that a one standard deviation increase in terror reduces tourism inflows by 7 percent in the short run and 15 percent in the long run.…”

“…Neumayer (2004) shows that a one standard deviation increase in terror reduces tourism inflows by 7 percent in the short run and 15 percent in the long run. Llorca-Vivero (2008) updates the analysis and finds that a one standard deviation increase leads to a decline in tourist numbers of around 10 to 16 percent, depending on the specification used. Other prime examples of economic activities not undertaken are reduced overall investment, reduced consumption expenditures (Llussá and Tavares 2011) and declining trade (Nitsch and Schumacher 2004).…”

Terrorism, Tourism and FDI: Estimating a Lower Bound on the Peace Dividend in Northern Ireland

“…In the extant literature, a compelling negative relation has been established, from several complementary vantage points, with respect to the implications of terrorism for economic activity Sandler 1991, 1996;Enders et al 1992;Coshall 2003;Drakos and Kutan 2003;Abadie et al 2003;Abadie and Gardeazabai 2005;Frey et al 2007;and, Llorca-Vivero 2008). The corresponding direct costs to aggregate output, however, generally appear relatively low and short term (Hobijn, 2002;International Monetary Fund, 2001;Navarro and Spencer, 2001) in comparison with violent internal conflict and external war (Blomberg et al 2004a) and natural disasters (Tavares, 2004).…”

“…In addition, there is ample evidence that terrorism differentially impacts on specific sectors. For example, international capital inflows Gardeazabal, 2005 andSandler, 1996) are likely to reduce materially as a result of terrorism and tourism is specifically vulnerable to terrorist attacks (Llorca-Vivero, 2008, Coshall, 2003, Drakos and Kutan, 2003Enders, et al, 1992;and, Enders and Sandler, 1991).…”

Do Political Instability, Terrorism, and Corruption Have Deterring Effects on Tourism Development Even in the Presence of Unesco Heritage? A Cross-Country Panel Estimate

“…Tourists' safety is always vulnerable to terrorist-related incidents and internal conflicts in host countries. In the tourism literature, most empirical research reveals that tourism is susceptible to terrorism acts, particularly if terrorist attacks happen in developing countries (Baker & Coulter, 2007;Bhattarai, Conway, & Shrestha, 2005;Llorca-Vivero, 2008;Thompson, 2011;Yaya, 2009). advantageous because such data provide more information, more variability, less collinearity among the variables, more degrees of freedom, and more efficiency (Baltagi, 2008).…”