Contribution of tourism to economic convergence in the european union member states

Abstract

The main objective of this paper is to determine whether tourism contributes to the economic convergence in the EU member states. The starting point of the analysis is the theoretical concepts of σ-convergence and (conditional) β-convergence. For the purpose of examining the relationship between tourism and σ-convergence in the long and short term, the cointegration test is used. Additionally, panel analysis is used for testing the model of conditional convergence. In this model, tourism as a conditional factor is operationalised by monetary indicators (consumption components and capital investments) as well as by a non-monetary one (direct employment) based on the tourism satellite account methodological framework. The model also tests a range of economic, social and ecological impacts on tourism and the economic convergence. The results proved that, although there is a long-term and short-term relationship between tourism and the economic growth convergence, tourism does not contribute to the economic convergence in the European Union member states, at least not to the extent that was expected.