Internet penetration and international travel and tourism expenditure: The role of foreign exchange control

Abstract

The total amount of digital travel sales worldwide increases significantly every year, yet previous studies on outbound tourism expenditures have scarcely discussed the role of foreign exchange control (Fxc) as a barrier to e-internationalization. In the era of e-commerce, residents of more than 40 economies are not allowed to buy or pay for foreign products by the Internet. This article, with data from 95 economies in the period 2012–2017, concludes that Internet penetration development increases international tourism expenditure. On the other hand, the control of foreign exchange decreases the relationship between internet penetration and tourism expenditure. Therefore, Fxc is clearly a barrier to electronic internationalization and tourism expenditure.