Contextual factors and efficiency gains in Italian tourist destinations

Abstract

The paper investigates the efficiency of 103 Italian provinces and some contextual factors that influence the competitiveness of a territorial tourist destination, defined as an ensemble of different historical, economic, environmental, and social traditions. Non-parametric Data Envelopment Analysis and semi-parametric bootstrapping extensions are applied over the period 2012-2019. The findings demonstrate that tourism destinations are considerably technically and scale inefficient, and that the total factor productivity is decreasing over time. The results also present a great heterogeneity of Italian provinces regarding their efficiency levels, suggesting that the traditional North-South regional divide of Italy does not apply in the tourism sector. Regarding the role of contextual factors as sources of efficiency gains, the cultural attractions, cultural public expenditures, and the rule of law increase technical efficiency of Italian provinces, whilst provinces with higher income and higher pollution receive negative gains.