Local Leaders’ Promotion Pressure and Tourism Development: Evidence From China

Abstract

The growing importance of tourism management within local governance highlights the imperative role of local leaders’ involvement. However, the understudied influence of promotion pressure, a key determinant of their behavior, remains largely unexplored. This study employs a novel institutional economics approach to investigate the impact of local leaders’ promotion pressure on tourism development in China. We analyze data from 334 prefecture-level cities spanning 1999 to 2019. Our findings reveal a positive correlation between promotion pressure and tourism development. Notably, this effect is amplified in economically advanced cities and those with a lower dependence on tourism. Further analysis using an instrumental variable-based mediation model suggests that promotion pressure shapes tourism development by influencing the structure of local government fiscal expenditure. These findings shed light on the intricate interplay between political incentives, fiscal policy, and the evolution of the tourism industry, offering valuable insights for crafting effective tourism governance strategies.