Tourism and Globalization: The International Division of Tourism Production

Abstract

An important facet of globalization is the international fragmentation of production. This phenomenon, also called international division of production processes, outsourcing, vertical specialization, and so on, has been studied for goods and many services but has so far been ignored for tourism. This article attempts to rectify that by providing theoretical and empirical evidence of various aspects of the international division of tourism production. In the modeling section, the traditional Ricardian paradigm of international trade theory is deliberately chosen to explain how the international splitting up of value-added chains in the tourism industry can occur across countries. The authors then conduct an empirical study of a sample of 38 countries to measure these countries’ comparative advantages in two segments of the tourism product system. Data from 1980-2004 indicate that tourism production is globally fragmented and that the scale of such fragmented production is quite substantial. Using more disaggregated data for 15 EU countries, the authors find evidence of a high level of fragmented tourism production as well.