Importing to Feed International Tourists: Growth Implications for Islands across the Globe

Baidoo, Francis and Pan, Lei and Fiador, Vera Ogeh Lassey and Agbloyor, Elikplimi Komla (2022): Importing to Feed International Tourists: Growth Implications for Islands across the Globe.

Abstract

Employing bootstrapped fixed and random effects estimation techniques on five-year-non-overlapping-averaged data, covering 1980 through 2019, this study, firstly, investigates, empirically, the potential bi-causal relationship between international tourist arrivals and the importation of consumables/merchandises, in the case of 45 sovereign islands. The growth implication of a concurrent pursuit of tourism expansion and merchandise importations is also examined. The study further investigates how over-reliance on imported merchandise to feed international tourists, and over-specialisation in the tourism sector, affect the tourism-led-growth hypothesis in case of these islands. Results from the study postulate that an increase in arrivals of international tourists significantly leads to an increase in the importation of consumable merchandises, and vice versa. Moreover, a moderate importation of merchandises to sustain tourist arrivals is significantly observed not to be detrimental to the growth of islands across the globe. However, the results further reveal that over-reliance on imported merchandises for the sake of international tourists, as well as over-specialisation in tourism with the help of imported merchandises, both exert significant detrimental net effects on the economic growth of islands across the globe. The findings hold policy guidelines for the pursuit of tourism-led and merchandise-import-led growth strategies among global islands.

• Item Type: MPRA Paper
• Language: English
• Keywords: Merchandise importation; Tourism specialisation; Economic growth; Global islands; Fixed and random effects
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity

References

Archer, B. H. (1982). The value of multipliers and the policy implications. Tourism Management, 3(4), 236-241.

Balaguer, L., & Cantavella-Jordá, M. (2002). Tourism as a long-run economic growth factor: the Spanish case. Applied Economics, 5(34), 877–884.

Assaf, A. G., & Josiassen, A. (2012). Identifying and Ranking the Determinants of Tourism Performance: A Global Investigation. Journal of Travel Research, 51(4), 388–399. https://doi.org/10.1177/0047287511426337

Baidoo, F., Agbloyor, E. K., Fiador, V. O., & Marfo, N. A. (2021). Do countries ’ geographical locations moderate the tourism-led economic growth nexus in sub-Saharan Africa ? Tourism Economics, 1–31. https://doi.org/10.1177/13548166211015512

Bélisle, F. J. (1984). Tourism and Food Imports : The Case of Jamaica *. Economic Development and Cultural Change, 3(8), 799–842.

Bojanic, D. C., & Lo, M. (2016). A comparison of the moderating effect of tourism reliance on the economic development for islands and other countries. Tourism Management, 53, 207–214. https://doi.org/10.1016/j.tourman.2015.10.006

Brambor, T., Clark, W. R., & Golder, M. (2006). Understanding interaction models: Improving empirical analyses. Political Analysis, 14(1), 63–82. https://doi.org/10.1093/pan/mpi014

Brida, J. G., Cortes-Jimenez, I., & Pulina, M. (2016). Has the tourism-led growth hypothesis been validated? A literature review. Current Issues in Tourism, 19(5), 394–430. https://doi.org/10.1080/13683500.2013.868414

Brida, J. G., & Pulina, M. (2010). A literature review on the tourism-led-growth hypothesis, 31. Retrieved from http://eprints.uniss.it/5623/1/Brida_J_Literature_review_on_the.pdf

Brida, J. G., & Risso, W. A. (2010). Tourism as a determinant of long-run economic growth. Journal of Policy Research in Tourism, Leisure and Events, 2(1), 14–28. https://doi.org/10.1080/19407960903542276

Capó, J., Font, A. R., & Nadal, J. R. (2007). Dutch disease in tourism economies: Evidence from the Balearics and the Canary Islands. Journal of Sustainable Tourism, 15(6), 615–627. https://doi.org/10.2167/jost698.0

Durbarry, R. (2004). Tourism and economic growth : the case of Mauritius. Tourism Economics, 10(4), 389–401.

Fayissa, B., Nsiah, C., & Tadasse, B. (2008). Impact of tourism on economic growth and. Tourism Economics, 14(4), 807–818.

Fischer, C. (2004). The influence of immigration and international tourism on the demand for imported food products, 1(1), 37–41. https://doi.org/10.1080/16507540410024489

Hazari, B., & Nowak, J.-J. (2003). Tourism, Guest Workers, and Resident Immiserization. The Journal of Developing Areas, 36(2), 101–124.

Iamsiraroj, S. (2016). The foreign direct investment-economic growth nexus. International Review of Economics and Finance, 42, 116–133. https://doi.org/10.1016/j.iref.2015.10.044

Josef, P., & Ravinesh, R. (2016). Economics of tourism & growth for small island countries. Tourism Management, 55, 272–275. https://doi.org/10.1016/j.tourman.2016.02.020

Karikari, N. K., Gyan, K. K., Khan, M. A. H., & Kusi, B. A. (2021). Institutional quality and social cost of intermediation in Africa: Does the level of financial market development matter? International Journal of Finance and Economics, (February). https://doi.org/10.1002/ijfe.2515

Katircioglu, S. (2010). Trade and growth in a non‐recognized small island state: Evidence from the Turkish republic of Northern Cyprus. Journal of Business Economics and Management, 11(1), 112–130. https://doi.org/10.3846/jbem.2010.06

Makun, K. K. (2018). Imports, remittances, direct foreign investment and economic growth in Republic of the Fiji Islands: An empirical analysis using ARDL approach. Kasetsart Journal of Social Sciences, 39(3), 439–447. https://doi.org/10.1016/j.kjss.2017.07.002

Martins, L. F., Gan, Y., & Ferreira-Lopes, A. (2017). An empirical analysis of the influence of macroeconomic determinants on World tourism demand. Tourism Management, 61, 248–260. https://doi.org/10.1016/j.tourman.2017.01.008

Milne, S. (1992). Tourism and development in South Pacific microstates. Annals of Tourism Research, 19(2), 191–212. https://doi.org/10.1016/0160-7383(92)90077-3

Mishra, V., Sharma, S. S., & Smyth, R. (2010). Is economic development in the Pacific island countries export led or import led? Pacific Economic Bulletin, 25(1), 46–63.

Naudé, Wim and Saayman, A. (2009). Determinants of tourist arrivals in Africa : a panel data regression analysis. Tourism Economics, 11 (3),(16479), 365–391.

Naude, W., & Saayman, A. (2005). Determinants of tourist arrivals in Africa: a panel data regression analysis. Tourism Economics, 11(3), 365–391. https://doi.org/10.5897/JAERD12.088

Nowak, J. J., & Sahli, M. (2007). Coastal tourism and “Dutch disease” in a small island economy. Tourism Economics, 13(1), 49–65. https://doi.org/10.5367/000000007779784452

Nowak, J. J., Sahli, M., & Cortés-Jiménez, I. (2007). Tourism, capital good imports and economic growth: Theory and evidence for Spain. Tourism Economics, 13(4), 515–536. https://doi.org/10.5367/000000007782696113

Pratt, S. (2013). Minimising food miles : issues and outcomes in an ecotourism venture in Fiji. Journal of Sustainable Tourism, 21(8), 1148–1165. https://doi.org/10.1080/09669582.2013.776060

Pulido-Fernández, J. I., & Cárdenas-García, P. J. (2021). Analyzing the Bidirectional Relationship between Tourism Growth and Economic Development. Journal of Travel Research, 60(3), 583–602. https://doi.org/10.1177/0047287520922316

Sampedro, C., Pizzitutti, F., Quiroga, D., Walsh, S., & Mena, C. (2018). Food supply system dynamics in the Galapagos Islands : agriculture , livestock and imports. Renewable Agriculture and Food Systems, 35(3), 234–248. https://doi.org/10.1017/S1742170518000534

Schubert, S. F., Brida, J. G., & Risso, W. A. (2011). The impacts of international tourism demand on economic growth of small economies dependent on tourism. Tourism Management, 32(2), 377–385. https://doi.org/10.1016/j.tourman.2010.03.007

Shahzad, S. J. H., Shahbaz, M., Ferrer, R., & Kumar, R. R. (2017). Tourism-led growth hypothesis in the top ten tourist destinations: New evidence using the quantile-on-quantile approach. Tourism Management, 60, 223–232. https://doi.org/10.1016/j.tourman.2016.12.006

Sinclair-Maragh, G., & Gursoy, D. (2015). Imperialism and tourism: The case of developing island countries. Annals of Tourism Research, 50, 143–158. https://doi.org/10.1016/j.annals.2014.12.001

Su, Y., & Liu, Z. (2016). The impact of foreign direct investment and human capital on economic growth: Evidence from Chinese cities. China Economic Review, 37, 97–109. https://doi.org/10.1016/j.chieco.2015.12.007

Su, Y. W., & Lin, H. L. (2014). Analysis of international tourist arrivals worldwide: The role of world heritage sites. Tourism Management, 40, 46–58. https://doi.org/10.1016/j.tourman.2013.04.005

Tang, C. F., & Tan, E. C. (2015). Does tourism effectively stimulate Malaysia’s economic growth? Tourism Management, 46, 158–163. https://doi.org/10.1016/j.tourman.2014.06.020

Tang, V. T., Tregenna, F., & Dikgang, J. (2019). Trade Openness and Economic Growth in Mauritius. Development and Sustainable Growth of Mauritius. https://doi.org/10.1007/978-3-319-96166-8

Telfer, D. J., & Wall, G. (1996). Linkages between Tourism and Food Production. Annals of Tourism Research, 23(3), 635–653.

Thomas, A., Moore, A., & Edwards, M. (2018). Feeding island dreams : exploring the relationship between food security and agritourism in the Caribbean. Island Studies Journal, 13(2), 145–162.

Torres, R. (2003). Linkages between tourism and agriculture in Mexico. Annals of Tourism Research, 30(3), 546–566. https://doi.org/10.1016/S0160-7383(02)00103-2

Varley, R. C. (1978). Tourism in Fiji: Some economic and social problems (No. 12).

Yacoumis, J. (1987). Tourism Marketing Strategy and Promotion Programme. Report prepared for the Tourism Council of the South Pacific Regional Tourism Development Programme. Suva: TCSP.

Yacoumis, J. (1986). Tourism Marketing Strategy and Short-Term Promotion Programme for Vanuatu. Report prepared for the United Nations Development Program and the World Tourism Organization as part of the Regional Tourism Planning and Training Phase 3 (RAS/86/1341. Madrid: WTO.