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Tourism and Economic Development: Evidence from Mexico’s Coastline

Faber, Benjamin ; Gaubert, Cecile

The American economic review, 2019-06, Vol.109 (6), p.2245-2293 [Peer Reviewed Journal]

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Title:
Tourism and Economic Development: Evidence from Mexico’s Coastline
Author: Faber, Benjamin ; Gaubert, Cecile
Subjects: Developing countries ; Economic development ; Economic integration ; Economic models ; Equilibrium ; LDCs ; Spillover effect ; Tourism
Is Part Of: The American economic review, 2019-06, Vol.109 (6), p.2245-2293
Description: Tourism is a fast-growing services sector in developing countries. This paper combines a rich collection of Mexican microdata with a quantitative spatial equilibrium model and a new empirical strategy to study the long-term economic consequences of tourism both locally and in the aggregate. We find that tourism causes large and significant local economic gains relative to less touristic regions that are in part driven by significant positive spillovers on manufacturing. In the aggregate, however, these local spillovers are largely offset by reductions in agglomeration economies among less touristic regions, so that the national gains from trade in tourism are mainly driven by a classical market integration effect.
Publisher: Nashville: American Economic Association
Language: English

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