What can governments do for economic recovery? The economic impact of tourism subsidies

Abstract

This research note uses the input-output analysis method to evaluate the economic impact of tourism subsidies issued by Guangdong Province, China. The results show that the travel agency industry received the most subsidies in both rounds of subsidies, followed by public facilities management, culture and art, accommodation, and retail industry. The direct, lateral, industry spreading, and multiplier effect coefficients of the first round of tourism subsidies are 5.136, 1.491, 12.610, and 19.237, respectively. The direct, lateral, industry spreading, and multiplier effect coefficients of the second round of tourism subsidies are 5.365, 1.592, 13.220, and 20.177, respectively. We clarify the effectiveness and pathways through which tourism subsidies stimulate the economy and suggest that future policies should focus more on the accommodation industry.