Tourism and Trade Nexus in Africa: A Gravity Model Approach

The tourism industry is now an important economic sector in Africa. However, as with trade, Africa’s global share of the tourism industry is quite small, which could be attributed to a similarly low level of both intra-regional trade and tourism. Prevailing data and studies suggest that there is a...

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Main Authors: Geoffrey Manyara, Laura Naliaka
Format: Article
Language:English
Published: AfricaJournals 2021-08-01
Series:African Journal of Hospitality, Tourism and Leisure
Subjects:
Online Access:https://www.ajhtl.com/uploads/7/1/6/3/7163688/article_1_10_3_793-804.pdf
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spelling doaj-dd21ac18ca5c4f2497d2b17afaf8c6f22021-08-25T06:10:41ZengAfricaJournalsAfrican Journal of Hospitality, Tourism and Leisure2223-814X2021-08-01103793804https://doi.org/10.46222/ajhtl.19770720-132Tourism and Trade Nexus in Africa: A Gravity Model ApproachGeoffrey Manyara0Laura Naliaka1United Nations Economic Commission for AfricaAfrica Economic Research ConsortiumThe tourism industry is now an important economic sector in Africa. However, as with trade, Africa’s global share of the tourism industry is quite small, which could be attributed to a similarly low level of both intra-regional trade and tourism. Prevailing data and studies suggest that there is a relationship between tourism and trade. The aim of this study, therefore, is to examine the empirical link between tourism and exports in Africa for the period 2006 to 2015. We estimate a structural gravity model using the Poisson pseudo maximum likelihood (PPML) estimator that allows for bilateral zero trade values between trading partners, controls for heteroskedasticity and addresses the potential endogeneity. We find that a 10 percent increase in intra-African tourism boosts the continental exports by between 1.4 and 3.2 percent. These results strongly posit that boosting regional tourism could be instrumental in catalysing intra-African trade, especially within the context of the African Continental Free Trade Area (AfCFTA). https://www.ajhtl.com/uploads/7/1/6/3/7163688/article_1_10_3_793-804.pdftourismtradeintra-africanafcftagravity model
collection DOAJ
language English
format Article
sources DOAJ
author Geoffrey Manyara
Laura Naliaka
spellingShingle Geoffrey Manyara
Laura Naliaka
Tourism and Trade Nexus in Africa: A Gravity Model Approach
African Journal of Hospitality, Tourism and Leisure
tourism
trade
intra-african
afcfta
gravity model
author_facet Geoffrey Manyara
Laura Naliaka
author_sort Geoffrey Manyara
title Tourism and Trade Nexus in Africa: A Gravity Model Approach
title_short Tourism and Trade Nexus in Africa: A Gravity Model Approach
title_full Tourism and Trade Nexus in Africa: A Gravity Model Approach
title_fullStr Tourism and Trade Nexus in Africa: A Gravity Model Approach
title_full_unstemmed Tourism and Trade Nexus in Africa: A Gravity Model Approach
title_sort tourism and trade nexus in africa: a gravity model approach
publisher AfricaJournals
series African Journal of Hospitality, Tourism and Leisure
issn 2223-814X
publishDate 2021-08-01
description The tourism industry is now an important economic sector in Africa. However, as with trade, Africa’s global share of the tourism industry is quite small, which could be attributed to a similarly low level of both intra-regional trade and tourism. Prevailing data and studies suggest that there is a relationship between tourism and trade. The aim of this study, therefore, is to examine the empirical link between tourism and exports in Africa for the period 2006 to 2015. We estimate a structural gravity model using the Poisson pseudo maximum likelihood (PPML) estimator that allows for bilateral zero trade values between trading partners, controls for heteroskedasticity and addresses the potential endogeneity. We find that a 10 percent increase in intra-African tourism boosts the continental exports by between 1.4 and 3.2 percent. These results strongly posit that boosting regional tourism could be instrumental in catalysing intra-African trade, especially within the context of the African Continental Free Trade Area (AfCFTA).
topic tourism
trade
intra-african
afcfta
gravity model
url https://www.ajhtl.com/uploads/7/1/6/3/7163688/article_1_10_3_793-804.pdf
work_keys_str_mv AT geoffreymanyara tourismandtradenexusinafricaagravitymodelapproach
AT lauranaliaka tourismandtradenexusinafricaagravitymodelapproach
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