How Do Economic Growth and Terrorism Affect Tourism in the Council of Europe Countries?

Abstract

The Council of Europe is one of the oldest European institutions in operation. This paper aims to examine the impact of economic growth and terrorism on international tourism for 33 Council of Europe countries. The period considered for analysis encompasses data from 1995 to 2018. The Panel Autoregressive Distributed Lag method was selected to gauge the short- and long-term impacts. The effects of globalization and the real effective exchange rate were also considered. The presence of sectional dependence heteroscedasticity and first-order autocorrelation in the models inferred the use of the Driscoll & Kraay (1998) estimator. The results found here support that Council of Europe decision-makers should develop public measures that promote tourism activities. At the same time, they can propose measures aimed at increasingly reducing terrorism and develop measures to encourage the attraction and capture of international tourism through the intrinsic advantages of the globalization phenomenon.