Domo Arigato Gozaimasu: Economic Spillovers of Regional Tourism in Japan

A growing body of literature investigates the relationship between tourism and economic growth (Brida et al. 2016); even if sub-national studies are deemed relevant in order to analyze the issue (Pablo-Romero and Molina, 2013), these are rare: thus, we aim to provide a first analysis of the bi-univocal relationship between tourism and economic growth for Japanese regions and prefectures, using multiple Granger Causality tests in a Bayesian VAR model, from 2007 to 2014. We find that either (or both) tourism-led growth hypothesis and economic-led tourism hypothesis are supported empirically in 4 out of 8 regions and in 19 out of 47 prefectures, in univocal or bi-univocal direction, proving that sub-national territories do not always display the behaviour found on the national level. Our findings suggest the use of tourism as a policy instrument able to stimulate economic growth on sub-national level, even if some regional discrepancies are to be expected.