Does trade pattern matter for tourism activities? Evidence from the twenty most visited countries

This study aims to investigate the relationship between international tourism and total trade, including exports and imports, for the twenty most visited countries. In order to accurately assess the relationship, the study employs the Emirmahmutoglu and Kose (2011) causality analysis, which accounts for cross-sectional dependency and heterogeneity. The empirical results show a unidirectional causality running from total trade, exports, and imports to international tourist arrivals for Germany, India, Mexico, and the Netherlands. Conversely, the causality runs from international tourist arrivals to total trade, exports, and imports for Portugal, Russia, and Spain (except imports). Additionally, a bidirectional causality link between international trade and tourism is found for China, indicating that both tourism and trade mutually reinforce each other. These results highlight the importance of considering the direction of causality in the relationship between tourism and trade, and developing targeted policies that take into account the unique characteristics of each country.