The Vulnerability Effect of International Tourism on a Destination’s Economy

ABSTRACT This study investigates how international tourism influences economic vulnerability for 69 economies, consisting of 36 low- and lower-middle-income economies (LMEs), and 33 upper-middle-income and high-income economies (UHEs). By applying assorted panel data estimations, the study finds that, first, international tourism increases the economic vulnerability of destination countries, and second, an analysis of two subsamples confirms the increasing effect of international tourism on economic vulnerability for UHEs. Surprisingly, the ratio of visitor spending to GDP impacts economic vulnerability negatively in LMEs, while the effect of the ratio of visitor spending to exports is positive. Some important policy implications have been raised. Lastly, the results have been checked for robustness by different estimators and strategies.