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An econometric model of revenues from international tourism for the transition economy of Croatia is estimated over the period 1993:1 to 1999:4. It is found that European Union GDP and the real effective exchange rate are significant factors influencing Croatian tourism revenues. Moreover, the 1995 military action by Croatia to regain authority over the territories occupied in 1991 had an adverse effect on tourism revenues. There is also evidence of seasonal variation in tourism revenues, with the tourist season from July to September exerting the largest impact. Finally, the estimated econometric model is robust with respect to the model's residual diagnostics and stability of the regression coefficients.
Payne et al. (Fri,) studied this question.
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