Diplomacy and inbound tourism to Greece: evidence from a dynamic gravity model

This article examines whether diplomatic engagement affects inbound tourism to Greece using a panel of 46 origin countries over 2008–2015. The analysis distinguishes between institutional diplomacy, measured by the number of Greek diplomatic representations, and high-level diplomacy, proxied by the duration of official prime ministerial visits. The baseline estimates rely on a two-step System GMM dynamic gravity specification, while Poisson pseudo-maximum likelihood (PPML) estimates provide robustness checks. The results indicate that diplomatic activity is positively associated with tourist arrivals to Greece. Institutional diplomacy is stable across specifications, while high-level visits are more specification-sensitive. Against the backdrop of the Greek sovereign debt crisis, the findings position diplomacy as a demand-shifting institutional factor and distinguish permanent diplomatic infrastructure, which appears to provide a more stable contribution to inbound tourism, from episodic high-level engagement.