impacts of tourism and fiscal expenditure on remote islands in japan a panel data analysis japan consists of many small inhabited islands in addition to four main islands we examine the impact of fiscal expenditure and the number of tourists on per capita taxable income in remote islands using panel data analyses the results show that both fiscal expenditure and population size have significant positive impacts on per capita taxable income whereas the number of tourists does not have statistically significant impact they indicate that tourism development would not work as a substitute for financial support from the government in other words continuous financial support may be needed to maintain the islands economies

does tourism influence economic growth a dynamic panel data approach on average tourism specialized countries grow more than others this is not consistent with the core of modern economic growth theory that suggests that economic growth is linked to sectors with high tech intensity and large scale in this article we use appropriate panel data methods to study the relationship between tourism and economic growth in general we show that tourism is a positive determinant of economic growth both in a broad sample of countries and in a sample of poor countries however contrary to previous contributions tourism is not more relevant in small countries than in a general sample this is a fully modified version of a working paper co authored by one of the authors

the impacts of tourism energy consumption and political instability on economic growth in the mena countries using panel data of 24 countries in the middle east and north african mena region from 2001 to 2009 the purpose of this study is to examine the impacts of tourism energy consumption and political instability on economic growth within the neoclassical growth framework to address the objective of this study we utilise both the static panel data approach as well as the dynamic generalised method of moments gmm estimator to examine the impact of candidate variables our results show that energy consumption and tourism significantly contribute to the economic growth of countries in the mena region hence our study lends some support to the existence of the tourism led growth and energy led growth hypotheses in the region in line with our expectation our estimation results also reveal that political instability impedes the process of economic growth and development in the mena region therefore macroeconomic policies to promote expansion in tourism and energy consumption will directly stimulate economic growth additionally efforts to help the region overcome its history of political instability would attract more international tourist arrivals and further invigorate economic growth

testing dependence between gdp and tourism s growth rates abstract the main aim of this paper is to link the economic behaviour and statistical properties of gdp and tourism receipts growth rates through modelling the dependence to that end two developed economies such as the united kingdom non tourist oriented and spain tourist oriented and an emerging economy such as croatia tourist oriented are considered as case studies therefore a copula based garch approach is employed to describe the dependence structure between gdp and tourism receipts growth rates in this respect any causality and cointegration between tourism and gdp could justify public policies that promote a more efficient public resource allocation in the tourism industry additionally evidence of dependence between growth rates can justify the extent and direction of these policies results indicate that there is a significant asymmetric and positive dependence between tourism and gdp growth rates for the three countries studied though only for croatia is it time varying over time

tourism as a long run economic growth factor the spanish case this paper examines the role of tourism in the spanish long run economic development the tourism led growth hypothesis is confirmed through cointegration and causality testing the results indicate that at least during the last three decades economic growth in spain has been sensible to persistent expansion of international tourism the increase of this activity has produced multiplier effects over time external competitivity has also been proved in the model to be a fundamental variable for spanish economic growth from the empirical analysis it can be inferred the positive effects on income that government policy in the adequacy of supply as well as in the promotion of tourist activity may bring about

the contribution of tourism development to economic growth in the korean economy abstract this study investigates the causal relations between tourism growth and economic expansion for the korean economy by using engle and granger two stage approach and a bivariate vector autoregression var model two principle results emerge from this study first the results of a cointegration test indicate that there is no long run equilibrium relation between two series second the outcomes of granger causality test imply the one way causal relationship of economic driven tourism growth the hypothesis of tourism led economic growth is not held in the korean economy this consequence is supported by testing the sensitivity of causality test under different lag selections along with the optimal lag

revisiting the tourism led growth hypothesis for turkey using the bounds test and johansen approach for cointegration abstract this paper empirically revisits and investigates the tourism led growth tlg hypothesis in the case of turkey by employing the bounds test and johansen approach for cointegration using annual data from 1960 2006 although gunduz and hatemi j 2005 is the tourism led growth hypothesis valid for turkey applied economics letters 12 499 504 support the tlg hypothesis for turkey suggesting unidirectional causation from tourism to economic growth by making use of the leveraged bootstrap causality tests and ongan and demiroz 2005 the contribution of tourism to the long run turkish economic growth ekonomick casopis journal of economics 53 9 880 894 suggest bidirectional causality between international tourism and economic growth in turkey this study does not find any cointegration between international tourism and economic growth in turkey therefore unlike the findings of gunduz and hatemi j 2005 and ongan and demiroz 2005 this study rejects the tlg hypothesis for the turkish economy since no cointegration was found and error correction mechanisms plus causality tests cannot be run for further steps in the long term

exports and economic growth evidence from 19th century europe abstract cointegration and granger causality tests on data for six european countries from around the middle of the 19th century to 1913 show that exports and gnp were cointegrated and granger causally related with export led growth in italy norway and sweden

the determinants of italian domestic tourism a panel data analysis abstract in this study a gmm panel data estimation is used to investigate the main determinants of italian domestic tourism demand as measured by regional bilateral tourism flows the analysis is developed both at aggregate level and for the two traditional macro areas of the country namely centre north and south for the whole nation the importance of traditional economic variables in determining domestic tourism flows is confirmed however tourist actual choices appear also to be influenced by past experiences and by regional differences in the quality of the wider environment additionally it appears that for italian tourists domestic and international destinations behave as substitutable goods the sub sample analysis highlights some interesting differences between macro areas in particular southern tourists appear more responsive to income variations and less sensitive to prices differentials than their northern counterparts moreover the degree of competition between domestic and outbound trips is higher in the south finally southern tourists seem to be more influenced by environmental attributes while northern tourists are more sensitive to cultural activities

determinants of international tourism a three dimensional panel data analysis international tourism is a fast growing industry generating half a trillion dollars in annual revenues and accounting for almost 10 of total international trade and almost half of total trade in services yet it has so far failed to receive the attention it deserves from mainstream economics this paper attempts to provide an initial understanding of the determinants of international tourism this paper claims that international tourism as other forms of trade in services is driven by unique factors of production and may be better dealt with in a single industry study rather than in a general equilibrium trade model in order to understand these determinants the world is viewed as a market of differentiated products and a discrete choice estimation technique is applied to a large three dimensional data set of tourist flows it is shown that a relatively simple estimation technique combined with a rich data set can deliver reasonable substitution patterns it is found among other things that pol

capital markets and the exchange rate with special reference to the dollarization debate in latin america the paper reviews the main challenges faced by policymakers in emerging market economies em in light of recent financial crises and taking into account salient factors like the existence of partial dollarization imperfect credibility weak financial systems and contagion the standard theory of optimal currency areas is discussed and criticized for omitting the above factors when these factors are taken into account an extreme foreign exchange regime like dollarization is shown to become much more attractive the paper discusses the pros and cons of dollarization and among other things shows that the lack of a lender of last resort is not necessarily a major drawback in em the paper also discusses inflation targeting it in a formal model it is shown that it could be subject to credibility problems similar to those found in exchange rate based stabilization programs

financial development and financing constraints international evidence from the structural investment model this article provides evidence that financial development impacts growth by reducing financing constraints that would otherwise distort efficient allocation of investment the financing constraints are inferred from the investment euler equation by assuming that the firm s stochastic discount factor is a function of the firm s financial position specifically the stock of liquid assets the magnitude of the changes in the cost of capital is twice as large in a country with a low level of financial development as in a country with an average level of financial development the size effect business cycles and legal environment effects are also considered copyright 2003 oxford university press

the response of worker effort to piece rates we measure the elasticity of worker effort with respect to changes in the piece rate using panel data collected from the payroll records of a british columbia tree planting firm our data contain information on daily worker productivity and the piece rate received over a five month period using a structural model to control for the endogeneity of the piece rate we estimate this elasticity to be approximately 2 14 we also calculate a nonstructural lower bound to this elasticity equal to 0 77 structural estimation also allows us to perform policy experiments and to compare firm profits under alternative compensation systems our results suggest that profits would increase by at least 17 percent were the firm to implement the optimal static contract as predicted by principal agent theory this increase in profits would be due to capturing worker rents after the revelation of private information over ability yet only a negligible proportion of these rents could be captured while inducing workers to reveal ability truthfully suggesting that dynamic considerations were important in determining the firm s actual choice of contract

compensation policy and worker performance identifying incentive effects from field experiments the role of field experiments in evaluating the effect of compensation policies on worker productivity is considered particular attention is paid to the ability of a field experiment to identify the effect of a permanent change in firm policy while field experiments solve endogeneity problems through randomization they do so within a specific and at times artificial environment that may not be replicated by a permanent policy change as such rather than providing a basis for the unrestricted identification of incentive effects experiments are better thought of as providing exogenous variation with which to identify structural parameters these parameters can in turn be used to predict the effects of policy changes jel j3 l2 c9

the exchange rate regime and the currency composition of corporate debt the mexican experience abstract this paper analyzes the effect that the change from a fixed to a floating exchange rate regime that took place in mexico in december 1994 had on the currency composition of corporate debt in particular the paper asks whether a fixed exchange rate regime biases corporate borrowing towards foreign currency due to an implicit exchange rate guarantee given by the government therefore under a predetermined regime firms will not fully internalize their exchange rate risk and will be more likely to engage in balance sheet mismatches than under a floating regime we study the main determinants of foreign currency borrowing of those firms listed in the mexican stock exchange from 1992 to 2000 to test whether balance sheet currency mismatches fell after the adoption of the floating exchange rate regime the results found support the view that the floating exchange rate regime has been useful in reducing exchange rate exposure

tall paper walls the political economy of visas and cross border travel cross border travel for business personal and tourism purposes is an important component of trade in services in 2013 travel accounted for 25 of services export in the world trade in services accounted for 12 of gdp in the world hence the role of travel in many economies is substantial the current paper studies the determinants of cross border flows of people with a particular emphasis on the role of visa policies we adopt the un general assembly affinity index a measure of the quality of bilateral relations between nations to instrument for bilateral visa policy we find that ceteris paribus imposing visa restrictions on a country reduces travel from that country by about 73 in 2010 implying restrictive visa policies discourage cross border travel significantly this implies an adverse impact of restrictive visa policies on trade in services

international travelling and trade further evidence for the case of spanish wine based on fractional vector autoregressive specifications this article deals with the relationship between international travelling and trade for this purpose we focus on a particular case study the connection between the spanish wine exports to germany and the german travellers to spain unlike previous studies we use a methodology based on fractional vector autoregressive var models which permits us to compute the impulse responses in a similar way as in the standard var case the results show that the orders of integration of the two series are constrained between 0 and 1 being higher for the arrivals series than for the exports the impulse response analysis reveals that an increase in travelling produces a positive initial impact on trade though it tends to disappear in the long run

is there a relationship between international trade and international travel this paper investigates for the first time whether there is a relationship between international trade and international travel flows using time series econometric techniques using data for australia and four important travel and trading partners the usa the uk nz and japan the paper tests three specific hypotheses that business travel leads to international trade that international trade leads to international travel and that international travel other than business travel leads to international trade using cointegration and granger causality approaches the paper finds support for prior beliefs that there is a relationship between international travel and international trade and suggests that this may be a fruitful area for further research

does tourism effectively stimulate malaysia s economic growth abstract this study attempts to further verify the validity of the tourism led growth hypothesis in malaysia using a multivariate model derived from the solow growth theory it employs annual data from 1975 to 2011 we find that economic growth tourism and other determinants are cointegrated specifically tourism has a positive impact on malaysia s economic growth both in the short run and in the long run the granger causality test indicates that tourism granger causes economic growth all this provides the empirical support for the tourism led growth hypothesis in malaysia in light of this any policy initiative that promotes tourism could contribute to malaysia s economic growth

how resilient is la reunion in terms of international tourism attractiveness an assessment from unit root tests with structural breaks from 1981 2015 even if local policymakers increasingly claim that tourism is one of the key factors of future economic development for the french small island la reunion international tourist arrivals are observed to be locked in a stagnation phase since the beginning of the 2000s starting from this stylised fact this article aims to study if this phenomenon results from major external events hurting this economy regularly next by using univariate unit root procedures with structural breaks we test for evidence of permanent or transitory effects of external shocks on international tourist inflows total by source markets and by category over the period 1981 2015 finally the empirical analysis allow us to reject the null of a unit root then stagnation of tourism arrivals to la reunion is not due to exogenous shocks but probably results from endogenous impediments within the domestic tourism industry and unsuitable public policies

time varying linkages between tourism receipts and economic growth in south africa the causal link between tourism receipts and gdp has recently become a major focus in the tourism economics literature results obtained in recent studies about the causal link appear to be sensitive with respect to the countries analysed sample period and methodology employed considering the sensitivity of the causal link we use rolling window and time varying coefficient estimation methods to analyse the parameter stability and granger causality based on a vector error correction model vecm when applied to south africa for the period 1960 2011 the findings are as follows results from the full sample vecm indicate that there is no granger causality between tourism receipts and gdp while the findings from the time varying coefficients model based on the state space representation show that tourism receipts have positive predictive content for gdp for the entire period with the exception of the period between 1985 and 1990 full sample time varying causality tests show bidirectional strong causal

economies of scale in the australian tourism industry the measurement of economies of scale in the tourism industry has not been done to this point as tourism is not a specific industry according to international statistical standards among many industries related to tourism four sectors accommodation transport retail trade and recreational services across six states and two territories from 1997 to 2007 are studied as they contribute nearly 70 of tourism output in australia by comparing regression results from the cobb douglas c d production function and the translog production function we find that there is evidence of increasing returns in transport retail trade and recreational services at the industry level however accommodation is characterized by constant returns to scale at the industry level as accommodation is responsible for the biggest share of tourism output this suggests that overall the tourism sector is not characterized by increasing returns we also find that the degrees of returns to scale from the c d and translog product

tourism led growth hypothesis in the top ten tourist destinations new evidence using the quantile on quantile approach this paper examines the empirical validity of the tourism led growth hypothesis in the top ten tourist destinations in the world china france germany italy mexico russia spain turkey the united kingdom and the united states using the quantile on quantile qq approach and a new index of tourism activity that combines the most commonly used tourism indicators this methodology recently introduced by sim and zhou 2015 provides an ideal framework with which to capture the overall dependence structure between tourism development and economic growth the empirical results primarily show a positive relation between tourism and economic growth for the ten countries considered with substantial variations across countries and across quantiles within each country the weakest links are noted for china and germany possibly because of the limited importance of the tourism sector relative to other major economic activities in those countries important country specific policy implications may be drawn from these findings

analysis of optimal timing of tourism demand recovery policies from natural disaster using the contingent behavior method this paper examines the applicability of contingent behavior hereafter cb method for analyzing dynamic processes and efficient policies in tourism demand recovery the cb questionnaires used for this study used a hypothetical disaster situation of bird flu in kyoto japan safety event visitor information and price discounting policies were designed accordingly respondents were then asked about their willingness to travel time the results showed the optimal timing for devising pertinent policies during the year we found that the first step requires a safety information announcement within one week immediately after disaster site decontamination the second step is the implementation of event information policy within 24th to 36th week after the disaster the third step constitutes announcing visitor information within the 37th to 52nd week after the second step the final step is the implementation of price discounting policy until the 52nd week immediately after the third step

measuring and forecasting regional environmental and economic efficiency in italy abstractenvironmental and economic efficiency has being receiving growing attention among researchers in general terms this concept is related to the capability of the economic systems to employ natural resources efficiently so as to increase economic and human wealth this clearly implies that both the economic and ecological aspects of decisions ought to be considered bearing this in mind this article considers economic and ecological performance together by applying data envelopment analysis and the malmquist productivity index to investigate the efficiency of the 20 italian regions from 2004 to 2011 the results reveal that the northern regions have been more efficient than the southern ones highlighting the strong geographical differences between the two furthermore this article uses the grey system theory to forecast regional economic and environmental efficiency the results of the forecasting analysis show that the north south duality remains strong and will possibly increase since the r

contractionary devaluation risk evidence from the free silver movement 1878 1900 i identify significant effects of devaluation risk on interest rates and output using us silver coinage policy news between 1878 and 1900 as clean shocks to exchange rate expectations the free sil

tourism trade and growth the case of cyprus although the relationship between international trade and economic growth has found a wide application area in the literature over the years this can not be said about tourism and growth or trade and tourism this study employs the bounds test for cointegration and granger causality tests to investigate a long run equilibrium relationship between tourism trade and real income growth and the direction of causality among themselves for cyprus results reveal that tourism trade and real income growth are cointegrated thus a long run equilibrium relationship can be inferred between these three variables on the other hand granger causality test results suggest that real income growth stimulates growth in international trade both exports and imports and international tourist arrivals to the island furthermore growth in international trade both exports and imports also stimulates an increase in international tourist arrivals to cyprus and finally real import growth stimulate growth in real export

corporate dollar debt and depreciations much ado about nothing abstract emerging markets firms often carry foreign currency debt on their balance sheets following a depreciation the expanding peso value of dollar liabilities could via a net worth effect offset the expansionary competitiveness effect to assess which effect dominates we use accounting data including the currency composition of liabilities for 450 nonfinancial firms in five latin american countries in the 1990s we find that firms holding more dollar debt do not invest less than their peso indebted counterparts following a depreciation we also show that these firms match the currency denomination of their liabilities with the exchange rate sensitivity of their profits

exploring different views of exchange rate regime choice the empirical distinction between de facto and de jure exchange rate regimes raises a number of interesting questions which factors may induce a de facto peg why do countries enforce a peg but do not announce it why do countries break their promises we show that a stable socio political environment and an efficient political decision making process are a necessary prerequisite for choosing a peg and sticking to it challenging the view that sees the exchange rate as a commitment device policymakers seem rather concerned with regime sustainability in the face of adverse economic and socio political fundamentals

tourism development and economic growth a closer look at panels abstract this paper applies the new heterogeneous panel cointegration technique to re investigate the long run comovements and causal relationships between tourism development and economic growth for oecd and nonoecd countries including those in asia latin america and sub sahara africa for the 1990 2002 period on the global scale after allowing for the heterogeneous country effect a cointegrated relationship between gdp and tourism development is substantiated it is also determined that tourism development has a greater impact on gdp in nonoecd countries than in oecd countries and when the variable is tourism receipts the greatest impact is in sub sahara african countries additionally the real effective exchange rate has significant effects on economic growth finally in the long run the panel causality test shows unidirectional causality relationships from tourism development to economic growth in oecd countries bidirectional relationships in nonoecd countries but only weak relationships in asia our empirical findings have major policy implications

exploring the effects of international tourism on china s economic growth energy consumption and environmental pollution evidence from a regional panel analysis abstract this study explores the effects of international tourism on china s economic growth energy consumption and environmental pollution as proxied by co 2 emissions in a multivariate framework using regional panel data over the period 1995 2011 our findings suggest that the tourism induced ekc hypothesis does not exist in central china and is merely weakly supported in eastern and western china however results show that tourism has a negative impact on co 2 emissions in the eastern region which contradicts with our perception to some extent panel causality tests show that the directions of causality in both short and long runs are mixed among regions nevertheless our findings reveal that tourism causally affects economic growth and co 2 emissions in the long run thus tourism led growth hypothesis is verified under all three scenarios our findings also suggest that in all three regions there is bidirectional causality between economic growth and co 2 emissions overall these results imply that low carbon tourism in china should be continuously supported which provides significant insights to policy makers at various government levels

causality cointegration and control abstract the first sections of the paper show that causality tests can be relevant when considering the effectiveness of a control mechanism rejecting some results in earlier papers the relevance comes from a more careful consideration of what information is available to whom and when compared to previous work the final section of the paper extends this analysis to cointegrated variables when causality is a necessary consequence

tourism and economic development the beach disease abstract this paper analyses empirically the danger of a dutch disease effect in tourism dependent countries in the long run data on 134 countries of the world over the period 1970 2007 is used in a first step the long run relationship between tourism and economic growth is analysed in a cross country setting the results are then checked in a panel data framework on gdp per capita levels that allows to control for reverse causality non linearity and interactive effects it is found that there is no danger of a beach disease effect on the contrary tourism dependent countries do not face real exchange rate distortion and deindustrialisation but higher than average economic growth rates investment in physical capital such as for instance transport infrastructure is complementary to investment in tourism

the impacts of immigrants and institutions on bilateral tourism flows abstract in this paper we use data on recent bilateral tourism flow from 34 organisation for economic co operation and development oecd countries to 52 middle to low income countries for the period 1995 2010 to determine whether immigration trade and institutional quality play a role in driving oecd nationals to visit immigrant source countries except for the african countries the results show that immigrants residing in oecd countries have a positive advertising effect for their home country inducing tourism flows from oecd countries we also find that the quality of institutions along with freedom and civil liberty indices are important in selecting tourism destinations a massive 8 of the variation in tourism flows can be accounted for by these factors these results hold for the subsample and the whole sample with two exceptions european and african destinations we posit that this feature of the data exists because european african countries are so similar to each other and small differences in the indexes do not matter at the top bottom of the distribution by controlling for gravity and macroeconomic stability variables we also show that the trade flows between countries among other factors play a crucial and stable role on tourism flows dynamic panel data estimation is used to account for the influence of repeat visits and support our findings

quality and endogenous tourism an empirical approach abstract we propose a theoretical model and an empirical study that highlight the role of quality of tourism services and endogenous tourism in long run economic growth we study a theoretical growth model of international trade where tourism is the growth engine and quality of tourism services has a positive impact on long term growth we also provide an empirical analysis to test the relation between tourism quality and economic growth in spain over the period 1970 2010 our results show that in the long run tourist arrivals quality of tourism accommodations and foreign gdp have a positive effect on spanish gdp in the short term changes in economic growth appear to lead to growth in tourist arrivals our findings support a two way causal relationship between real gdp growth and tourism growth in spain

forecasting long haul tourism demand for hong kong using error correction models forecasting accuracy is particularly important when forecasting tourism demand on account of the perishable nature of the product this study compares a range of forecasting models in the context of predicting annual tourist flows into hong kong from the major long haul markets of the us the uk germany and major short haul markets of china japan and taiwan econometric forecasting models considered included error correction models ecms based on permanent income life cycle pi lc hypothesis pi lc ecm and alternative cointegration approaches engle and granger 1987 johansen 1988 and ordinary least square ols approaches both autoregressive integrated moving average arima and no change model hereafter naive models are used as a benchmark time series model for accuracy comparisons it was hypothesized that pi lc ecm is a better forecasting model particularly for long haul tourism demand the objective of this article is to investigate whether the application of pi lc ecm could improve the

tourism expansion tourism uncertainty and economic growth new evidence from taiwan and korea abstract this study examines the causal relationship between tourism expansion and economic growth in two asian countries taiwan and south korea an egarch m model with uncertainty factors is employed to examine the direction of causality between tourism expansion and economic growth as well as the impulse impacts of uncertainty on both variables the results indicate that the tourism led economic growth hypothesis is supported for taiwan while a reciprocal causal relationship is found for south korea the significant impacts of uncertainty on growth are also identified

a panel data analysis of the effect of corruption on tourism this study empirically tests the hypothesis that corruption has a negative effect on tourism having to pay bribes while on holiday or a business trip increases the costs of travelling to a country where corruption is prevalent tourists are thus more likely to travel to countries where these additional costs do not need to be incurred this hypothesis is tested using a panel data set of over 100 countries and 16 years the results indicate that a 1 point increase in the corruption perception index implying a decrease in corruption results in a 2 to 7 increase in tourist inflows in addition tourist inflows rise with gdp per capita openness and growth and are higher in countries with a temperate climate

foreign currency debt financial crises and economic growth a long run view what are the costs of hard currency liabilities after being implicated in the global financial instability of the late 1990s the costs are widely believed to be large and as a result many emerging markets have pushed to minimize currency mismatches we study the growth effects of exposure to foreign currency debt using data from two periods of international financial integration 1880 1913 and 1973 2002 for over 45 countries hard currency debt is associated with increased risks of currency and debt crises in both periods especially when a country s macroeconomic financial fundamentals are weak we find the risk of financial crisis associated with hard currency debts translated into significantly diminished growth rates however we also find evidence that strong financial development and policy credibility attenuate the crisis risks associated with high exposure to hard currency debt which has implications for eastern european countries where large current account deficits and high levels of hard currency debt are believed to pose financial risks in this region some countries have adopted flexible exchange rates and avoided foreign currency debt several others have built up large net foreign currency liabilities and are exposed to a significant likelihood of a financial crisis in the near future

is the tourism economic growth nexus time varying bootstrap rolling window causality analysis for the top 10 tourist destinations this article explores the time varying causal nexus between tourism development and economic growth for the top 10 tourist destinations in the world namely china france germany italy mexico t

evidence on performance pay and risk aversion abstract making use of a unique representative data set we find clear evidence that risk aversion has a highly significant and substantial negative impact on the probability that an employee s pay is performance contingent which confirms the well known risk incentive trade off

currency crises and monetary policy in an economy with credit constraints this paper presents a simple model of currency crises which is driven by the interplay between the credit constraints of private domestic firms and the existence of nominal price rigidities the possibility of multiple equilibria including a currency crisis equilibrium with low output and a depreciated domestic currency results from the following mechanism if nominal prices are sticky a currency depreciation leads to an increase in the foreign currency debt repayment obligations of firms and thus to a fall in their profits this reduces firms borrowing capacity and therefore investment and output in a credit constrained economy which in turn reduces the demand for the domestic currency and leads to a depreciation we examine the impact of various shocks including productivity fiscal or expectational shocks we then analyze the optimal monetary policy to prevent or solve currency crises we also argue that currency crises can occur both under fixed and flexible exchange rate regimes as the primary source of crises is the deteriorating balance sheet of private firms

corporate governance tourism growth and firm performance evidence from publicly listed tourism firms in five middle eastern countries this study explores the under researched relationship between corporate governance and firm performance in tourism companies we employ instrumental variable modelling using 2sls for publicly listed firms in five countries in the middle east board independence is found to be positively related to firm performance and stock performance suggesting that having independent directors among board members will improve overall firm performance board size shows opposing results large boards enhance firm profitability however small boards exhibit more efficient stock performance finally we support the tourism led growth hypothesis in our selected sample these findings have empirical implications for policy makers governments and academics

international tourism higher education and economic growth the case of north cyprus this study investigates the long run equilibrium relationship between international tourism higher education growth real income growth and the direction of causality among these variables for the turkish republic of northern cyprus which is not recognised by any country other than turkey results reveal that international tourism and higher education are in a long run equilibrium relationship with real income growth international tourism and higher education have an inelastic yet positively significant impact on real income growth in the long run period finally the results of the present study reveal that both the tourism led growth and the higher education led growth hypotheses are confirmed for north cyprus

the long run impact of exchange rate regimes on international tourism flows abstract notwithstanding the systematic inclusion of an exchange rate variable of some form in studies examining international tourism flows hardly any research has been carried out to test for a possible exchange rate regime effect drawing from recent advances in exchange rate regime classifications this paper begins to fill this gap by investigating the impact of exchange rate regimes on international tourism flows the study employs a system generalized methods of moments sys gmm estimation for tourist arrivals on a panel of 27 organization for economic co operation and development oecd and non oecd countries for the period 1980 2011 the results identify multiple exchange rate regime effects and support the importance of maintaining a relatively stable exchange rate to attract international tourist arrivals

the demand for international tourism in the mediterranean region the paper studies the demand for international tourism in the mediterranean region first a review of the most important attempts to model econometrically the demand for international tourism in the past is given followed by a formal presentation of the proposed theoretical model in particular a version of the almost ideal demand system aids is adopted and a description of the variables involved and their sources together with the estimation procedure are provided the diagrammatic analysis performed contributes to a better understanding of the evolution of the dependent variable over time the results with respect to the expenditure as well as to the own and cross price elasticities may be regarded as econometrically satisfactory and a reasonable economic explanation is given

fixed effect estimation of highly mobile production technologies we consider fixed effect estimation of a production function where inputs and outputs vary over time space and cross sectional unit we exploit variability in the spatial dimension to identify time varying individual effects without parametric assumptions on the effects while estimation is unbiased asymptotics along the spatial dimension allow estimation of robust standard errors and asymptotic normality of the marginal products also if inference on the estimates of the individual effects is warranted then spatial asymptotics provide asymptotic normality while precluding an incidental parameters problem caused by asymptotics along the time or crosssectional dimensions we apply our results to a production function of bottom trawler fishing vessels in the flatfish fisheries of the bering sea we find significant spatial variability of output catch which we exploit in estimation of a harvesting function we conclude that vessel individual effects did not change across the period 2002 to 2004 we apply the theory of ranking and selection to determine that individual effects are not statistically significant across vessels

maturity mismatch and financial crises evidence from emerging market corporations substantial attention has been paid in recent years to the risk of maturity mismatch in emerging markets although this risk is microeconomic in nature the evidence advanced thus far has taken the form of macro correlations we evaluate this mechanism empirically at the micro level by using a database of over 1500 publicly traded firms from fifteen emerging markets with special focus on latin america and east asia while east asia corporates have tended to issue more debt at short maturities than their latin american counterparts we show that this is generally matched by greater holdings of liquid assets as a result the distribution of net shortterm exposure is remarkably similar across regions we attempt to measure the risk of such exposure by estimating at the firm level the eect on investment of short term exposure under capital account volatility for the whole sample and in both regions individually this eect is statistically zero contrary to the prediction of the maturity mismatch hypothesis this conclusion is robust to using a variety of dierent estimators alternative measures of capital flows and controls for devaluation eects and access to international capital

causality between exports and economic growth abstract this paper utilizes granger causality tests in investigating the relationship between exports and national income from a consistent data set for 47 developing countries in africa new empirical results as well as suggestions for future research are presented

the impact of foreign liabilities on small firms firm level evidence from the korean crisis abstract using korean firm level data on publicly listed and privately held firms together with firm exit data we find strong evidence that holdings of foreign currency denominated debt negatively affected the economic performance of small firms during the 1997 98 crisis the large exchange rate depreciation that occurred during the crisis resulted in a decline in net worth for firms with foreign currency denominated debt on their balance sheets small firms with more short term foreign debt were more likely to declare bankruptcy conditional on surviving the crisis small firms that had more short term foreign debt experienced larger declines in sales the exit bankruptcy margin accounts for a large fraction of small firms adjustment during the crisis

oil prices tourism income and economic growth a structural var approach for european mediterranean countries abstract in this study a structural var model is employed to investigate the relationship among oil price shocks tourism variables and economic indicators in four european mediterranean countries in contrast with the current tourism literature we distinguish between three oil price shocks namely supply side aggregate demand and oil specific demand shocks overall our results indicate that oil specific demand shocks contemporaneously affect inflation and the tourism sector equity index whereas these shocks do not seem to have any lagged effects by contrast aggregate demand oil price shocks exercise a lagged effect either directly or indirectly to tourism generated income and economic growth the paper does not provide any evidence that supply side shocks trigger any responses from the remaining variables results are important for tourism agents and policy makers should they need to create hedging strategies against future oil price movements or plan for economic policy developments

corporate debt firm size and financial fragility in emerging markets abstract the post global financial crisis period shows a surge in corporate leverage in emerging markets and a number of countries with deteriorated corporate financial fragility indicators altman s z score firm size plays a critical role in the relationship between leverage firm fragility and exchange rate movements in emerging markets while the relationship between firm leverage and distress scores varies over time the relationship between firm size and corporate vulnerability is relatively time invariant all else equal large firms in emerging markets are more financially vulnerable and also systemically important consistent with the granular origins of aggregate fluctuations in gabaix 2011 idiosyncratic shocks to the sales growth of large firms are positively and significantly correlated with gdp growth in our emerging markets sample relatedly the negative impact of exchange rate shocks has a more acute impact on the sales growth of the more highly levered large firms

the bounds test approach for cointegration and causality between financial development international trade and economic growth the case of cyprus this study employs the bounds test for co integration and granger causality tests to investigate the long run equilibrium relationship and the direction of causality between financial development international trade and real income growth for the cyprus economy the results of the study reveal that financial development as measured by broad money m2 international trade and real income growth are cointegrated thus a long run equilibrium relationship can be inferred among these three variables on the other hand granger causality test results suggest that in cyprus the growth in real income stimulates the growth of international trade both exports and imports and the growth of money supply furthermore growth in imports of goods and services also stimulates a growth in exports of goods and services of cyprus although this result contradicts our initial expectations it indicates the importance of capital inflows in cyprus that plays a major role in financing the investments mainly in the tourism

the effect of financial liberalization on the capital structure and investment decisions of indonesian manufacturing establishments this article analyzes the consequences of financial liberalization using a large panel of indonesian manufacturing establishments it discusses whether financial reforms have had an impact on investment and on the allocation of credit and whether the effects differ depending on the type of firms the overall conclusion is that shifting from administrative toward market based allocation of credit has increased borrowing cost particularly for smaller firms but at the same time has benefited firms by giving them widened access to finance

is the tourism led growth hypothesis valid after the global economic and financial crisis the case of spain 1957 2014 abstract since the first paper on the subject was published in 2002 the tourism led growth hypothesis tlgh has constituted one of the most predominant topics in tourism literature spain is a leading country in the tourism industry and one where this hypothesis has been tested with several studies confirming the relationship between spain s tourism development and its economic growth however the existing studies for spain do not take into account recent turbulences such as the global financial and economic crisis and the arab spring uprisings that have shocked tourism markets this paper re examines the tlgh for the spanish case in the light of these events in order to investigate the robustness of the relationship between tourism and economic growth

incentives allocation and labour market reforms during transition the case of urban china 1986 1990 has the reform process in china resulted in the introduction of incentives directed at a more efficient allocation of resources using data on individual earnings in urban liaoning province for the period 1986 1990 and a wage equation approach we address this issue in the context of labour market reforms focusing specifically on returns to education our results indicate that failure to address the issue of endogenous selection of more able individuals into state owned enterprises soes can severely bias returns downwards unlike in soes returns in collective owned enterprises coes increased the latter having been allowed to grow out of the plan more quickly and subject to more competition in factor and product markets we conclude that decentralization without competition is unlikely to result in the introduction of an efficient incentive mechanism the more administratively determined regular wages are one avenue for increased returns we find evidence of differentiated bonuses in coes but

analyst following and pay performance sensitivity evidence from china we examine whether analyst following is associated with pay performance sensitivity in china based on our analyses of 17 020 chinese firm years from 2007 to 2015 we find that pay performance sens

reason for reserve reserve requirements and credit this paper considers the impact of a regulatory policy action on bank credit and traces its incidence across banks i make use of a reserve requirement increase in lebanon that was considerably greater on foreign currency deposits than on domestic currency deposits all banks cut lending as they scrambled to adjust portfolios but the policy shock disproportionately affected banks with a greater reliance on dollar funding and with low buffers of dollar liquid assets exposed domestic owned banks also adjusted more slowly than similar foreign owned banks that obtained outside funding descriptive firm bank matching evidence reveals a disproportionate impact on small firms

foreign currency borrowing by small firms in emerging markets when domestic banks intermediate dollars this paper investigates what induces small firms in an emerging market economy to borrow dollar credit from domestic banks our data are from a unique survey of firms in lebanon the findings complement studies of large firms with foreign currency loans from foreign lenders exporters naturally hedged against currency risk are more likely to incur dollar debt firms also partly hedge themselves by passing currency risk to customers and suppliers less opaque firms with easily verifiable collateral and higher net worth are more likely to access dollar credit firms reliant on formal financing banks and supplier credit are more likely to contract dollar debt than firms reliant on informal financing family friends and moneylenders bank relationships however do not increase the dollar debt likelihood and finally profitable firms are less likely to have dollar debt information frictions and limited collateral therefore constrain dollar credit even when it is intermediated domestically

investigating causality in international air freight and business travel the case of australia few studies have examined the link between air cargo and business travel despite there being a generally accepted understanding that these two variables are inextricably related to each other thi

is tourism an engine for economic recovery theory and empirical evidence abstract the purpose of this study is to examine the causal relationships between tourism development and economic growth for this purpose the dumitrescu and hurlin 2012 technique was employed to analyze the casual link between tourism development and economic growth in seven european countries the results showed that there is bidirectional causality between growth in tourism receipts and economic growth suggesting that economic growth and tourism development are interdependent and that tourism development stimulates economic growth and vice versa in these countries theoretical and practical implications are discussed within the realms of growth conservation feedback and neutrality hypotheses

the nature of the relationship between international tourism and international trade the case of german imports of spanish wine this article deals with the relationship between international trade and tourism we focus on the effect that german tourism to spain has on german imports of spanish wine due to the different stochastic properties of the series under analysis which display different orders of integration a methodology is used based on long memory regression models where tourism is supposed to be exogenous the period covered is january 1998 to november 2004 the results show that tourism has an effect on wine imports that lasts between 2 and 9 months disaggregating the imports across the different types of wine it is observed that only for red wines from navarra penedus and valdepenas and to a certain extent for sparkling wine tourism produces an effect on future import demand from a policy making perspective our results imply that the impact of tourism on the host economy is not only direct and short term but also oblique and delayed thus reinforcing the case for tourism as a means for economic development

does tourism promote cross border trade we estimate a simultaneous bivariate qualitative choice model of arizona agribusiness firms propensity to trade and visit as a tourist the cross border state of sonora mexico venture business visits quantified through the tourism equation were found to have the largest impact on a firm s propensity to trade tourist visits have a greater impact on trade when combined with other firm attributes such as age perceived need for geographic diversity foreign language fluency and firm size than if considered alone our results suggest that there is a role for government agencies to play in overcoming imperfect information related to trade opportunities through facilitating exploratory business venture and tourist visits

a nonparametric analysis of insufficient wage incentives in the chinese health industry abstractthis study provides empirical results on the insufficient wage incentives in the chinese health industry which may result in the poor productivity of high ability medical personnel we fir

corporate structure liquidity and investment evidence from japanese industrial groups this paper presents evidence suggesting that information and incentive problems in the capital market affect investment we come to this conclusion by examining two sets of japanese firms the first set has close financial ties to large japanese banks that serve as their primary source of external finance and are likely to be well informed about the firm the second set of firms has weaker links to a main bank and presumably faces greater problems raising capital investment is more sensitive to liquidity for the second set of firms than for the first set the analysis also highlights the role of financial intermediaries in the investment process

aggregation and linearity in the provision of intertemporal incentives we consider the problem of providing incentives over time for an agent with constant absolute risk aversion the optimal compensation scheme is found to be a linear function of a vector of n accounts which count the number of times that each of the n kinds of observable events occurs the number n is independent of the number of time periods so the accounts may entail substantial aggregation in a continuous time version of the problem the agent controls the drift rate of a vector of accounts that is subject to frequent small random fluctuations the solution is as if the problem were the static one in which the agent controls only the mean of a multivariate normal distribution and the principal is constrained to use a linear compensation rule if the principal can observe only coarser linear aggregates such as revenues costs or profits the optimal compensation scheme is then a linear function of those aggregates the combination of exponential utility normal distributions and linear compensation schemes makes computations and comparative statics easy to do as we illustrate we interpret our linearity results as deriving in part from the richness of the agent s strategy space which makes it possible for the agent to undermine and exploit complicated nonlinear functions of the accounting aggregates

internal debt crises and sovereign defaults internal and sovereign debt crises occur together and happen more frequently in economies with weak bankruptcy institutions this paper provides a novel explanation internal crises arise because of the inability to liquidate private debtors when many default in an optimal contract a successful entrepreneur repays yet an unsuccessful one defaults and liquidates his assets the bounds on liquidation generate however a second equilibrium where domestic borrowers default because others are also defaulting during these coordinated defaults tax collections fall which increases sovereign default risk in the model joint debt crises are an optimal response to informational problems in private sector lending

does a common currency promote countries growth via trade and tourism the main aim of this study is to contribute to the debate on the effects of a common currency in particular the impact of a common currency on growth via trade and tourism is explored for a panel dataset which includes 179 countries as destination and 30 oecd countries as origin over the period 1995 2006 this research contributes to previous work in three ways i tourism is included as an additional channel for a common currency to promote growth ii the heterogeneity of countries is addressed by dividing the sample into three groups of countries by income and iii up to date data including the case of the euro are considered the results obtained suggest that a common currency strengthens economic growth by promoting not only international trade but also tourism

exploring the regional distribution of tourism and the extent to which there is convergence abstract in this paper we test the hypothesis of convergence in a set of twelve of the main tourism source markets of spain over a time period that ranges from january 2000 to september 2015 we analyse the potential convergence by following an econometric strategy consisting of three different methodologies firstly we test for the presence of full convergence in the dataset by means of the panel stationary test developed by hadri 2000 next we conduct a robustness check for the full convergence hypothesis by considering the potential existence of structural breaks in the dataset through the test proposed by carrion i silvestre et al 2005 finally the hypothesis of club convergence philips and sul 2007 is also tested the results point to absence of full convergence even when controlling for structural breaks while three different clubs of convergence are found we discuss potential policy implications that can be extracted from these results

the relationship between investment and large exchange rate depreciations in dollarized economies abstract we use a simple financial friction in an economy with high degree of liability dollarization and currency mismatch to show that the negative balance sheet effect of an exchange rate depreciation may be observable only if the magnitude of the depreciation is large enough this result justifies the difficulty to find strong empirical evidence for balance sheet effects and suggests the convenience of including a large depreciation term in empirical analyses we review some of the related empirical literature and provide some new evidence of this large depreciation effect

sorting and incentive effects of pay for performance an experimental investigation agency theory highlights losses in productivity that may occur when the interests of owners and employees are imperfectly aligned pay for performance has been proposed as a solution to this proble

an analysis of the principal agent problem most analyses of the principal agent problem assume that the principal chooses an incentive scheme to maximize expected utility subject to the agent s utility being at a stationary point an important paper of mirrlees has shown that this approach is generally invalid we present an alternative procedure if the agent s preferences over income lotteries are independent of action we show that the optimal way of implementing an action by the agent can be found by solving a convex programming problem we use this to characterize the optimal incentive scheme and to analyze the determinants of the seriousness of an incentive problem

education and labor market discrimination using a model of statistical discrimination and educational sorting we explain why blacks get more education than whites of similar cognitive ability and we explore how the armed forces qualification test afqt wages and education are related the model suggests that one should control for both afqt and education when compar ing the earnings of blacks and whites in which case a substantial black white wage differential emerges we reject the hypothesis that differences in school quality between blacks and whites explain the wage and education differentials our findings support the view that some of the black white wage differential reflects the operation of the

the role of inflation targeting in international debt denomination in developing countries abstract this paper analyzes the inflation targeting experience of developing countries as an effective monetary policy framework to promote changes in the currency composition of their international debt using matching with difference in differences to address the self selection bias we find that inflation targeting has led to a 3 6 percentage point reduction in the foreign currency share of international debt in targeting countries when compared to non targeting countries with the effect especially pronounced for sovereign international debt differentiating by type of owner we find a reduction of the foreign currency share in foreign held total sovereign debt but no effect on domestic held debt furthermore from the analysis of the us dollar and euro shares we find that inflation targeting has contributed to a 9 percentage points lower dollar share in international debt in targeting countries compared to non targeting countries while the effect on the euro share is negligible this not only provides evidence that the structural features of international financial markets matter but also that monetary policy can help developing countries reduce their reliance on foreign currency debt especially if it is held by foreign investors

growth effects of leisure tourism and the level of economic development abstractthis study examines 1 whether leisure tourism can contribute to economic growth and 2 if it does whether its growth effects are constant across levels of economic development leisure tourism differs from business tourism in the causal relation with economic growth in addition the natural and heritage related resources for leisure tourism are limited and not reproducible this notion has a significant implication for the relationship between the growth effects of leisure tourism and the level of economic development thus the current study focuses on leisure tourism and controls for the effects of business tourism as an economy grows the growth effects of leisure tourism are expected to diminish due to a lack of continued productivity improvement in the tourism industry the empirical findings in this research reveal that leisure tourism contributes to economic growth at an early stage of economic development but its contribution becomes weaker as the economy develops