Tourism and Economic Development: Evidence from Mexico's Coastline
Benjamin Faber, Cecile Gaubert
American Economic Review · 2019 · Volume 109 · Issue 6
Abstract
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.
Keywords
Industry Studies: Manufacturing: General, Sports, Gambling, Restaurants, Recreation, Tourism, Industrialization, Manufacturing and Service Industries, Choice of Technology, Economic Development: Urban, Rural, Regional, and Transportation Analysis, Housing, Infrastructure, Regional Economic Activity: Growth, Development, Environmental Issues, and Changes, Tourism: Industry Studies, Tourism and Development
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