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Intra-tourism trade, income distribution and tourism endowment: an econometric investigation

By J Hanna, L Lévi and Sylvain Petit

Abstract

International audienceEmpirical investigation (Nowak et al., 2012) points out that vertical intra-industry trade (VIIT) in Europe is the dominant type of intra-industry trade (IIT) in the tourism sector. This article is the first in tourism literature to test separately the determinants of vertically and horizontally differentiated services, using the most recent models in the theory of IIT. We examine bilateral trade among all trading partners of the sample of European countries, covering the period 2000 to 2008. We show that differences in Gross Domestic Product (GDP) per capita and the income-distribution overlap, as well as cultural proximity, are the most significant driving forces behind VIIT for European countries. Geographic distance has a negative effect, whereas specific tourism endowments and relative size of the economies are less conclusive. These results confirm theory predictions and most of the empirical findings related to the pattern of VIIT for the manufacturing sector. As expected, we find that determinants of VIIT cannot explain horizontal intra-industry trade (HIIT) in tourism. We suggest two alternative methods of estimation: Generalized Least Squares (GLS) logistic function and the fractional logit estimator. We conclude that there are common factors explaining IIT in the manufacturing and tourism trades

Topics: Intra-tourism trade, income distribution overlap, bilateral tourism flows, vertical differentiation, fractional-logit, JEL: C - Mathematical and Quantitative Methods/C.C3 - Multiple or Simultaneous Equation Models • Multiple Variables/C.C3.C31 - Cross-Sectional Models • Spatial Models • Treatment Effect Models • Quantile Regressions • Social Interaction Models, JEL: F - International Economics/F.F1 - Trade/F.F1.F14 - Empirical Studies of Trade, JEL: L - Industrial Organization/L.L8 - Industry Studies: Services/L.L8.L89 - Other, [SHS.ECO]Humanities and Social Sciences/Economics and Finance
Publisher: 'Informa UK Limited'
Year: 2015
DOI identifier: 10.1080/00036846.2015.1005817
OAI identifier: oai:HAL:hal-01831500v1
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