Drivers of Productivity in the Portuguese Nature Tourism Industry

Part of the Smart Innovation, Systems and Technologies book series (SIST, volume 208)Considering the importance of tourism to the world economy, productivity measurement has been raising increasing interest in academia and recognized as critically important for the understanding of the strengths and weaknesses of the tourism sector. Thus, this paper analyses the determinants of firm-level labor productivity of Portuguese nature tourism firms. A fixed effects model was used to analyze the impact of physical capital, human capital, firm size, innovation, competition and agglomeration economies on labor productivity of Portuguese nature tourism firms, for 2014–2017. The sample comprises 369 firms, representing 55% of firms operating in nature tourism in the mainland. Results show that labor productivity is driven by physical capital, suggesting that human resources in nature tourism are more productive when helped by machinery and equipment, for example information technology. By contrast, the negative impact of the number of employees on labor productivity may be triggered by inefficiencies, due to dysfunctions in tourism services with excess of personnel. Also, and in the case of Algarve, the presence of agglomeration economies may hinder labor productivity. Indeed, the existence of many tourism firms in the region and, therefore, several employment opportunities, might dampen the incentive to increase productivity on the part of employees in nature tourism firms. These results can be of significant use to further understand the various dimensions of tourism management.info:eu-repo/semantics/publishedVersio