Key points are not available for this paper at this time.
This study investigates the impact of domestic and international tourism on economic complexity, a crucial determinant of economic resilience and growth. While tourism is widely recognised for its role in economic development, its specific effects on a nation's economic complexity – a measure of an economy's ability to produce diverse and sophisticated products – remain underexplored. Motivated by this gap, we hypothesise that domestic tourism and international tourism positively influence economic complexity, with effects varying across different income levels. We apply dynamic panel data models to address potential endogeneity issues using a comprehensive dataset of 123 economies, spanning 45 high-income, 33 upper-middle-income, and 45 lower-middle-income countries over two decades. Our findings reveal that domestic and international tourism expenditure significantly enhances economic complexity globally, with domestic tourism having a consistent positive effect across all income groups. In contrast, international tourism positively impacts lower – and upper-middle-income economies but has a negative effect in high-income economies. These results highlight tourism's nuanced role as a driver of economic complexity, offering empirical support for tourism-led development policies. The study provides valuable insights for policymakers and researchers on leveraging tourism for sustainable economic development, emphasising the need for tailored strategies based on income levels.
Nguyen et al. (Mon,) studied this question.