Stefania Lionetti, Ph.D, Istituto di Ricerche Economiche, University of Lugano, via Maderno 24, Lugano, 6904, Switzerland
Many governments nowadays recognize the important role of tourism in both economic growth and social progress, and this is why they try to exploit their tourism potential. While in 1950 international tourism generated revenues for US$ 2,1 billion, in 2004 this number has risen to US$ 622,7 billion. In many countries tourism is used as an strategy to achieve greater economic performance. The potential economic benefits are: increased income , both directly and as a result of the multiplier effects of tourism revenues (particularly the informal sector), earnings of foreign exchange , new employment opportunities, access to foreign direct investment and foster linkages and economic diversification (Markandya, Taylor and Pedroso, WB) (Sahli and Nowak 2007). Specifically, Tourism specialization can help to explain the observed high growth rates of small economies. The literature until now however, demonstrates that tourism per se does not lead to economic growth. Among the costs that investment in tourism may arise we find: inflationary pressure due to tourist demand, costs of infrastructure development, leakages to international investors or corporations
One way of analyzing the relationship between tourism and growth is to study the link between tourism and trade, on the assumption that more trade leads to economic growth. This study seeks to analyze the impact of tourism on trade and growth in Latin American Countries by using a panel data approach and a dataset provided by ECLAC.
In many developing and least developed countries, the tourist sector is significantly larger than other sectors such as manufacturing or agriculture, in terms of participation and economic activity. At the same time, however, tourism is a highly vulnerable economic activity, dependent on a number of factors, some of which are beyond the control of developing countries. Global events (related to international politics, health-related risks, climate factors, etc) may have a detrimental impact on the performance of the sector. Other factors, however, are policy-dependent and in this connection adopting a coherent developmental framework for trade in tourism services becomes a crucial issue, particularly for those countries with high economic dependence on tourism. The purpose of this study is determining the contribution of the tourism sector to economic growth of Latin America. The dataset covers the period from 1990 until 2005.