Differential Impacts of Tourism on GDP Growth: A Comparative Study of Developed and Developing Economies

Abstract

Tourism is a key driver of economic growth, yet its contributions differ significantly between developed and developing nations. This study compares these two contexts using panel data from 1995 to 2023, employing Fixed Effect and Random Effect econometric models. It examines the role of tourist expenditure, occupancy rates, governance quality, and CO₂ emissions. Unlike previous research, this work systematically bridges a gap by analysing how these factors differentially impact GDP growth. Findings reveal that infrastructure and high-income tourism are pivotal in developed nations, while governance quality and bed occupancy rates are critical in developing economies. This dual-context approach offers actionable insights for crafting tailored tourism policies that balance economic growth and sustainability, contributing to the discourse on global tourism dynamics.