Tourism Development and Italian Economic Growth: The Weight of the Regional Economies

Abstract

This research aims to study the relationship between economic growth and the increase in the tourism sector in Italy. Unlike most of the literature, we use the value added in the main economic sectors involved in tourism activity as a proxy for tourism development. The use of the tourism value added allows us to analyze the effect of both international and domestic tourism on per capita GDP growth. The main working hypothesis we tested is whether the relationship between GDP growth and the expansion of the tourism sector is in any way influenced by the geographic area referenced and/or the time period considered. Accordingly, we conducted our analysis at both the national and subnational (cluster) levels, splitting the original sample into two equal subperiods (1997–2008 and 2009–2019). The panel VAR analysis shows that for the country as a whole, tourism growth depends on the past value of the economic growth rate, especially for the subperiod 2009–2019. The cluster analysis clarifies that these outcomes are strongly determined by the cluster that covers the wealthiest Italian regions.