Tourism Development and Economic Complexity: An Empirical Analysis

ABSTRACT This study examines the relationship between tourism and economic complexity using a nonparametric methodology to characterize the dynamics across 94 countries over the period 1995–2019. After transforming the raw data into a bi‐dimensional series, a hierarchical clustering methodology is computed to uncover countries of similar performance. Two main clusters, plus two small clusters and some outliers arise from our results. The main clusters are composed of developed and developing countries characterized by high and low levels, respectively, of complexity and international tourism expenditures. Some countries have observed movements across clusters, but most of them remain in their groups for the whole period. The evolution of such clusters shows three main stylized facts: certain countries move across clusters; the low performance cluster increases its size during the period, while the high performance one tends to be (more) compact; the distance between the two groups increases over time. JEL Classification: C14, 011, Z32