Domestic tourism spending and economic vulnerability

Abstract

This study examines the influence of domestic tourism on economic vulnerability index (EVI). Domestic tourism spending has a significant effect in reducing EVI. These results are consistent with two sub-indices of EVI (shock index and exposure index). Interestingly, it is found that: (i) this impact is consistent in low- and lower-middle-income countries, while domestic tourism has a non-significantly effect in upper-middle and high-income countries of increasing EVI; (ii) these results are consistent in the long-run; and (iii) the impact of domestic tourism is consistent in both the 2002–2007 and 2008–2012 periods, but is statistically non-significant in the 2013–2017 period. Notably, we find that domestic tourism spending has a U-shape effect on EVI; while international tourism has an increasing effect.