This paper analyzes the nonlinear impact of political risk and economic development on tourism revenues. A dynamic threshold panel model is applied to a sample of 119 countries over 8 years. A positive association between economic development and tourism revenues is identified. The results also show that the impact of improvements in political stability on growth in tourism revenues is dependent on the current level of economic development. For highly developed countries, increased political stability does not impact tourism revenues. However, there is a significant positive impact of improved political stability on tourism revenues for less-developed countries.
AbdellaABNaghaviNFahBCY (2018) The effect of corruption, trade openness and political stability on foreign direct investment: empirical evidence from BRIC countries. International Journal of Advanced and Applied Sciences5(3): 32–38.
2.
AlesinaAPerottiR (1996) Income distribution, political instability, and investment. European Economic Review40(6): 1203–1228.
3.
ArellanoMBondS (1991) Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies58(2): 277–297.
4.
ArmborstA (2010) Modelling terrorism and political violence. International Relations24(4): 414–432.
5.
BakarNARosbiS (2020) Effect of Coronavirus disease (COVID-19) to tourism industry. International Journal of Advanced Engineering Research and Science7(4): 189–193.
6.
BakkerMvan der DuimRPetersK, et al. (2020) Tourism and Inclusive Growth: Evaluating a Diagnostic Framework. Boston, MA: Tourism Planning & Development, pp. 1–24.
7.
BalaguerJCantavella-JordáM (2002) Tourism as a long-run economic growth factor: the Spanish case. Applied Economics34(7): 877–884.
8.
BhatiaARoyBKumarA (2022) A review of tourism sustainability in the era of Covid-19. Journal of Statistics & Management Systems25(8): 1871–1888.
9.
BouchouchaNBenammouS (2018) Does institutional quality matter foreign direct investment? Evidence from African countries. Journal of the Knowledge Economy11: 1–15.
10.
BridaJGCortes-JimenezIPulinaM (2016) Has the tourism-led growth hypothesis been validated? A literature review. Current Issues in Tourism19(5): 394–430.
11.
BriedenhannJWickensE (2004) Tourism routes as a tool for the economic development of rural areas-vibrant hope or impossible dream?Tourism Management25(1): 71–79.
12.
CavalheiroMBJoiaLACavalheiroGMDC (2020) Towards a smart tourism destination development model: promoting environmental, economic, socio-cultural and political values. Tourism Planning & Development17(3): 237–259.
13.
ChienFZhangYSharifA, et al. (2023) Does air pollution affect the tourism industry in the USA? Evidence from the quantile autoregressive distributed lagged approach. Tourism Economics29(5): 1164–1180.
14.
ClementsMAGeorgiouA (1998) The impact of political instability on a fragile tourism product. Tourism Management19(3): 283–288.
15.
CorrêaSCHGoslingMDS (2020) Travelers’ Perception of Smart Tourism Experiences in Smart Tourism Destinations. Boston, MA: Tourism Planning & Development, pp. 1–20.
16.
De NeveJEWardGDe KeulenaerF, et al. (2018) The asymmetric experience of positive and negative economic growth: global evidence using subjective well-being data. The Review of Economics and Statistics100(2): 362–375.
17.
DegaregeGALovelockB (2019) Sustainable tourism development and food security in Ethiopia: policy-making and planning. Tourism Planning & Development16(2): 142–160.
18.
DossouTAMNdomandji KambayeEBekunFV, et al. (2023) Exploring the linkage between tourism, governance quality, and poverty reduction in Latin America. Tourism Economics29(1): 210–234.
19.
DritsakisN (2004) Tourism as a long-run economic growth factor: an empirical investigation for Greece using causality analysis. Tourism Economics10(3): 305–316.
20.
DuDLewAANgPT (2016) Tourism and economic growth. Journal of Travel Research55(4): 454–464.
21.
Eugenio-MartinJLMartín MoralesNScarpaR (2004) Tourism and economic growth in latin American countries: a panel data approach. In: Social Science Research Network Electronic Paper. Rochester, NY: Social Science Electronic Publishing Inc.
22.
FerreiraMDAGracianoPFLealSR, et al. (2019) Night of terror in the city of light: the terrorist acts in Paris and the evaluation of the destination image by Brazilian tourists. Brazilian Journal of Tourism Research13(1): 19–39.
23.
GargA (2015). Travel risks vs tourist decision making: a tourist perspective. International Journal of Hospitality & Tourism Systems8(1): 1–9.
24.
GeroskiPAJacqueminA (1988) The persistence of profits: a European comparison. The Economic Journal98(391): 375–389.
25.
GösslingSScottDHallCM (2020) Pandemics, tourism and global change: a rapid assessment of COVID-19. Journal of Sustainable Tourism29(1): 1–20.
26.
HallCM (2010) Crisis events in tourism: subjects of crisis in tourism. Current Issues in Tourism13(5): 401–417.
27.
HallCMO’SullivanV (1996) Tourism, Political Stability and Violence. In: Tourism, crime and international security issues. Hoboken, NJ: Wiley, pp. 105–121.
28.
HallerAPButnaruGIHârșanGDT, et al. (2021) The relationship between tourism and economic growth in the EU-28. Is there a tendency towards convergence?Economic Research-Ekonomska Istraživanja34(1): 1121–1145.
29.
HansenBE (1999) Threshold effects in non-dynamic panels: estimation, testing, and inference. Journal of Econometrics93(2): 345–368.
30.
HotiSMcAleerMShareefR (2005) Modelling country risk and uncertainty in small island tourism economies. Tourism Economics11(2): 159–183.
31.
IssaIAAltinayL (2006) Impacts of political instability on tourism planning and development: the case of Lebanon. Tourism Economics12(3): 361–381.
32.
JiangYKhaskheliARazaSA, et al. (2021) Threshold non-linear relationship between globalization, renewable energy consumption, and environmental degradation: evidence from smooth transition models. Environmental Science and Pollution Research28(11): 13323–13339.
33.
Jiménez-GuerreroJFPiedra-MuñozLGaldeano-GómezE, et al. (2021) The global economic crisis and international tourism: a Sub-Continental analysis. Tourism Planning & Development18(1): 1–24.
34.
KebedeNS (2018) The fate of tourism during and in the aftermath of political instability: Ethiopia tourism in focus. Journal of Tourism and Hospitality7: 1–7.
35.
KhanMJKhanFAminS, et al. (2020) Perceived risks, travel constraints, and destination perception: a study on sub-saharan African medical travellers. Sustainability12(7): 2807.
36.
KhandakerSIslamSZ (2017) International tourism demand and macroeconomic factors. International Journal of Economics and Financial Issues7(5): 389–393.
37.
KhaskheliAJiangYRazaSA, et al. (2021) Financial development, international trade, and environmental degradation: a nonlinear threshold model based on panel smooth transition regression. Environmental Science and Pollution Research28: 1–12.
38.
KorstanjeMEClaytonA (2012) Tourism and terrorism: conflicts and commonalities. Worldwide Hospitality and Tourism Themes4(1): 8–25.
39.
LawCCZhangYGowJ, et al. (2022) Dynamic relationship between air transport, economic growth and inbound tourism in Cambodia, Laos, Myanmar and Vietnam. Journal of Air Transport Management98: 102161.
40.
LeeYK (2016) Impact of government policy and environment quality on visitor loyalty to Taiwan music festivals: moderating effects of revisit reason and occupation type. Tourism Management53: 187–196.
41.
LeeCCChangCP (2008) Tourism development and economic growth: a closer look at panels. Tourism Management29(1): 180–192.
42.
LiuAPrattS (2017) Tourism’s vulnerability and resilience to terrorism. Tourism Management60: 404–417.
43.
LolosSPalaiosPPapapetrouE (2021) Tourism-led growth asymmetries in Greece: evidence from quantile regression analysis. Portuguese Economic Journal: 1–24.
44.
LumsdonL (2000) Transport and tourism: cycle tourism - a model for sustainable development?Journal of Sustainable Tourism8(5): 361–377.
45.
MatthewsHG (1974) International tourism and political science research. Annals of Tourism Research2(4): 195–203.
46.
MbaiwaJE (2005) The socio-cultural impacts of tourism development in the Okavango Delta, Botswana. Journal of Tourism and Cultural Change2(3): 163–185.
47.
MeoMSChowdhuryMAFShaikhGM, et al. (2018) Asymmetric impact of oil prices, exchange rate, and inflation on tourism demand in Pakistan: new evidence from nonlinear ARDL. Asia Pacific Journal of Tourism Research23(4): 408–422.
48.
MoraFOWiktorowiczQ (2003) Economic reform and the military: China, Cuba, and Syria in comparative perspective. International Journal of Comparative Sociology44(2): 87–128.
49.
MorakabatiYKapuścińskiG (2016) Personality, risk perception, benefit sought and terrorism effect. International Journal of Tourism Research18(5): 506–514.
50.
MorakabatiYFletcherJPrideauxB (2012) Tourism development in a difficult environment: a study of consumer attitudes, travel risk perceptions and the termination of demand. Tourism Economics18(5): 953–969.
51.
MushtaqAZamanK (2014) The relationship between political instability, terrorism and tourism in SAARC region. Journal of Economic Info1(1): 23–40.
52.
NeumayerE (2004) The impact of political violence on tourism. Journal of Conflict Resolution48(2): 259–281.
53.
NguyenVHFunckC (2019) Tourism’s contribution to an equal income distribution: perspectives from local enterprises. Tourism Planning & Development16(6): 637–656.
54.
Pérez-RodríguezJVSantana-GallegoM (2020) Modelling tourism receipts and associated risks, using long-range dependence models. Tourism Economics26(1): 70–96.
55.
Pérez-RodríguezJVRachingerHSantana-GallegoM (2020a) Testing the validity of the tourism-led growth hypothesis under long-range dependence. Current Issues in Tourism24: 1–26.
56.
Pérez-RodríguezJVRachingerHSantana-GallegoM (2020b) Does tourism promote economic growth? A fractionally integrated heterogeneous panel data analysis. Tourism Economics28: 1354816620980665.
57.
Perez-RodríguezJVLedesma-RodríguezFSantana-GallegoM (2015) Testing dependence between GDP and tourism’s growth rates. Tourism Management48: 268–282.
58.
ProkkolaEK (2010) Borders in tourism: the transformation of the Swedish-Finnish border landscape. Current Issues in Tourism13(3): 223–238.
59.
RazaSAQureshiMAAhmedM, et al. (2021) Non-linear relationship between tourism, economic growth, urbanization, and environmental degradation: evidence from smooth transition models. Environmental Science and Pollution Research28(2): 1426–1442.
60.
RiveraMA (2017) The synergies between human development, economic growth, and tourism within a developing country: an empirical model for Ecuador. Journal of Destination Marketing & Management6(3): 221–232.
61.
SahaSYapG (2013) The moderation effects of political instability and terrorism on tourism development. Journal of Travel Research53(4): 509–521.
62.
SamitasAAsteriouDPolyzosS, et al. (2018) Terrorist incidents and tourism demand: evidence from Greece. Tourism Management Perspectives25: 23–28.
SeoMHShinY (2016) Dynamic panels with threshold effect and endogeneity. Journal of Econometrics195(2): 169–186.
65.
SequeiraTNNunesPM (2008) Does country risk influence international tourism? A dynamic panel data analysis*. The Economic Record84(265): 223–236.
66.
ShahzadSJHFerrerR (2019) Dynamic spillover effects among tourism, economic growth and macro-finance risk factors. Portuguese Economic Journal19(3): 173–194.
67.
ShahzadSJHShahbazMFerrerR, et al. (2017) Tourism-led growth hypothesis in the top ten tourist destinations: new evidence using the quantile-on-quantile approach. Tourism Management60: 223–232.
68.
SiakwahPMusavenganeRLeonardL (2020) Tourism governance and attainment of the sustainable development goals in africa. Tourism Planning & Development17(4): 355–383.
69.
SönmezSFSönmezS (2019) Tourism, terrorism and political instability. Annals of Tourism Research25(2): 416–456.
70.
SönmezSF (1998) Tourism, terrorism, and political instability. Annals of Tourism Research25(2): 416–456.
TapperR (2001) Tourism and socio-economic development: UK tour operators’ business approaches in the context of the new international agenda. International Journal of Tourism Research3(5): 351–366.
73.
UyarAKuzeyCKoseogluMA, et al. (2023) Travel and tourism competitiveness index and the tourism sector development. Tourism Economics29(4): 1005–1031.
74.
WaringGF (1996) Industry differences in the persistence of firm-specific returns. The American Economic Review86(5): 1253–1265.
WuTPWuHCLiuSB, et al. (2018) The relationship between international tourism activities and economic growth: evidence from China’s economy. Tourism Planning & Development15(4): 365–381.
77.
WuTPWuHCWuST, et al. (2020) Economic policy uncertainty and tourism nexus dynamics in the G7 countries: further evidence from the wavelet analysis. Tourism Planning & Development18: 529–546. DOI: 10.1080/21568316.2020.1825520
78.
YangYZhangHChenX (2020) Coronavirus pandemic and tourism: Dynamic stochastic general equilibrium modeling of infectious disease outbreak. Annals of tourism research83: 102913.
79.
YapGSahaS (2013) Do political instability, terrorism, and corruption have deterring effects on tourism development even in the presence of UNESCO heritage? A cross-country panel estimate. Tourism Analysis18(5): 587–599.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
