Is Tourism in Lebanon Subject to Permanent or Transitory Exogenous Shocks?

Abstract

The tourism industry makes a significant contribution to Lebanese gross domestic product (GDP). Lebanon has been rocked by political instability and regional conflicts over the past several decades. These exogenous shocks can adversely affect visitor arrivals. Using monthly data from 2008 to 2013, this article attempts to identify some statistically significant shocks to visitor arrivals to Lebanon and their nature (i.e., whether or not the impact of the shocks was temporary). The empirical analysis based on univariate as well as panel unit root testing procedures, where structural breaks are endogenously determined, suggests that at least one exogenous shock has significantly affected tourist arrivals to Lebanon. However, in overall terms, the impact of these shocks on visitor arrivals has been temporary.