To what extend economic uncertainty effects tourism investments? Evidence from OECD and non-OECD economies

Ender Demir; Giray Gozgor; Sudharshan Reddy Paramati

doi:10.1016/j.tmp.2020.100758

To what extend economic uncertainty effects tourism investments? Evidence from OECD and non-OECD economies

Ender Demir, Giray Gozgor, Sudharshan Reddy Paramati (Lead / Corresponding author)

University of Dundee School of Business

Research output: Contribution to journal › Article › peer-review

Abstract

This paper aims to examine the role of economic policy uncertainty (EPU) on tourism investments across the samples of OECD, non-OECD, high-income, upper-middle-income, and low-income economies. We account for cross-sectional dependence and endogeneity and also incorporate economic development, financial development, and trade openness indicators in the analyses. By using annual data between 1996 and 2016 and a total of 101 countries, we provide robust estimates on the determinants of tourism investments. The findings from the Common Correlated Effects Mean Group (CCEMG) and the Group Mean approaches show that the EPU has a significant negative impact on tourism investments across the panels. Moreover, other estimates suggest that economic development, financial development, and trade positively contribute to tourism investments.

Original language	English
Article number	100758
Number of pages	8
Journal	Tourism Management Perspectives
Volume	36
Early online date	23 Oct 2020
DOIs	https://doi.org/10.1016/j.tmp.2020.100758
Publication status	Published - Oct 2020

Keywords

CCEMG estimator
Economic development
Economic policy uncertainty
EPU index
Tourism investments
World uncertainty index

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10.1016/j.tmp.2020.100758Licence: Elsevier User Licence

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Embargo ends: 23/10/22

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abstract = "This paper aims to examine the role of economic policy uncertainty (EPU) on tourism investments across the samples of OECD, non-OECD, high-income, upper-middle-income, and low-income economies. We account for cross-sectional dependence and endogeneity and also incorporate economic development, financial development, and trade openness indicators in the analyses. By using annual data between 1996 and 2016 and a total of 101 countries, we provide robust estimates on the determinants of tourism investments. The findings from the Common Correlated Effects Mean Group (CCEMG) and the Group Mean approaches show that the EPU has a significant negative impact on tourism investments across the panels. Moreover, other estimates suggest that economic development, financial development, and trade positively contribute to tourism investments.",

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