Where Can Tourism-Led Growth and Economy-Driven Tourism Growth Occur?

Abstract

In this study, we investigate the causal relationships between international tourism growth and regional economic expansion in China, and more importantly, disclose the factors determining the occurrence of these relationships. The empirical results reveal that 10 of 29 regions experienced tourism-led growth (TLG) during 1978 to 2013, whereas nine regions experienced economy-driven tourism growth (EDTG). Different from the past literature, this study uses Bayesian probit models to unveil the factors influencing these different growth patterns. Our results suggest that regions with less-developed economies, larger economic sizes, and covering larger geographic areas are more likely to experience TLG, and regions with less-developed economies are more likely to experience EDTG as well. Lastly, practical implications are provided.