<abstract xmlns="http://www.w3.org/1999/xhtml"><bold>Subject and purpose of work</bold>: Tourism was the fastest growing industry until the outbreak of Covid-2019. Nevertheless, there are a few studies on how the industry interacts with the rest of economies within a comprehensive analytical framework. The main concern of this study is how international and interregional tourism interacts with national economic development and economic structural change. Tourism and economic growth are investigated in a multi-regional small open economy which is perfectly competitive.<bold>Materials and methods:</bold> National economy consists of multiple regions and each region has three sectors: industry, service, and housing. Production side is the same as in the neoclassical growth theory. Households move freely between regions, equalizing utility level between regions by selecting housing, goods, tourism, and saving. A region’s amenity is endogenously related to the region’s population.<bold>Results:</bold> We explicitly solve the dynamics of the multi-regional economy. The system has a unique stable equilibrium point.<bold>Conclusions:</bold> We simulate the motion of the model and examine the effects of changes in the rate of interest, foreigners’ preference for visiting a region, a region ‘s total productivity of the service sector, domestic consumers’ preference for visiting a region, as well as the propensity to save, the propensity to consume regional services and housing.</abstract>

Subject and purpose of work: Tourism was the fastest growing industry until the outbreak of Covid-2019. Nevertheless, there are a few studies on how the industry interacts with the rest of economies within a comprehensive analytical framework. The main concern of this study is how international and interregional tourism interacts with national economic development and economic structural change. Tourism and economic growth are investigated in a multi-regional small open economy which is perfectly competitive.Materials and methods: National economy consists of multiple regions and each region has three sectors: industry, service, and housing. Production side is the same as in the neoclassical growth theory. Households move freely between regions, equalizing utility level between regions by selecting housing, goods, tourism, and saving. A region’s amenity is endogenously related to the region’s population.Results: We explicitly solve the dynamics of the multi-regional economy. The system has a unique stable equilibrium point.Conclusions: We simulate the motion of the model and examine the effects of changes in the rate of interest, foreigners’ preference for visiting a region, a region ‘s total productivity of the service sector, domestic consumers’ preference for visiting a region, as well as the propensity to save, the propensity to consume regional services and housing.

Economic Development and International and Interregional Tourism

College of International Management, Ritsumeikan Asia Pacific University

Economic and Regional Studies / Studia Ekonomiczne i Regionalne

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Economic Development and International and Interregional Tourism"}

Subject and purpose of work: Tourism was the fastest growing industry until the outbreak of Covid-2019. Nevertheless, there are a few studies on how the...

Economic Development and International and Interregional Tourism

Published Online: Dec 31, 2020

Page range: 375 - 387

Received: Oct 01, 2020

Accepted: Oct 01, 2020

DOI: https://doi.org/10.2478/ers-2020-0028

Keywords
interregional trade, international tourism, services, growth, wealth accumulation

© 2020 Wei-Bin Zhang, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Economic Development and International and Interregional Tourism

Published Online: Dec 31, 2020

Page range: 375 - 387

Received: Oct 01, 2020

Accepted: Oct 01, 2020

DOI: https://doi.org/10.2478/ers-2020-0028

Keywordsinterregional trade, international tourism, services, growth, wealth accumulation

© 2020 Wei-Bin Zhang, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
interregional trade, international tourism, services, growth, wealth accumulation