Economic growth and tourism performance in Latin America and the Caribbean

Abstract

Since the growing interest in the study of the dynamics of tourism and its implications for economic growth, this paper explores the Latin America and the Caribbean case. From the economic regimes’ conception and time series symbolization, we perform a cluster analysis and a posterior causality relationship estimation between economic growth and tourism performance for 22 countries of Latin America and the Caribbean considering the period between 1995 and 2015. Results show the existence of two clusters of countries with similar dynamic behaviour within them. The estimations show a positive causal and unidirectional relationship from economic growth to the tourism industry in the low-performing tourism cluster, and also a positive and bidirectional causal relationship in the high-performing tourism one. JEL codes: C33; C36; Z32.

Keywords

• Economic growth
• Tourism
• Regimes dynamic
• Cluster analysis
• Causality
• Latin America.