Journal
ECONOMIC MODELLING
Volume 52, Issue -, Pages 1026-1033Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.econmod.2015.10.043
Keywords
International trade; Tourism; Gravity equation; Intensive and extensive margin
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Funding
- Spanish Ministry of Economy and Competitiveness [ECO2011-23189]
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The empirical relationship between trade and tourism has been explored during recent years finding that international tourism promotes international trade between countries. However, the impact of tourism on trade flows has been neglected within standard international trade models such as the gravity equation. The main aim of this paper is to provide empirical and theoretical evidence that tourism matters for international trade. To that end, the framework proposed by Helpman, Melitz and Rubinstein (2008) is used by recognising that tourism flows could reduce fixed and variable costs of exporting. Moreover, once the model is estimated, the empirical evidence suggests that tourism increases both the probability of two countries trading with each other and the volume of international trade between them. (C) 2015 Elsevier B.V. All rights reserved.
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