The effect of EU membership on tourism in Croatia

Abstract

This study examines the impact of EU membership on tourism in Croatia, one of the most important economic sectors in the country. Using the counterfactual synthetic control method, the causal effect of EU membership on overnight tourists in Croatia in the period from 2013 to 2021 is estimated. The results suggest there is a large, positive, and long-term effect of the EU joining on overnight visitors in Croatia, with European tourists being the main contributors to tourism growth. In the period before COVID-19, the maximum discrepancy between the observed number of tourists and the synthetic value was achieved in 2017, with Croatia receiving an additional 3 million visitors, or 23 percent more than the value of the synthetic. Although these results are context-specific, the resemblance of Croatia to some EU candidate countries provides insights into possible tourism outcomes of integration in Europe.