The sources of comparative advantage in tourism
Stellenbosch Working Paper Series No. WP01/2010Publication date: 2010
Author(s):
[protected email address] (Department of Economics, University of Stellenbosch)
[protected email address] (Department of Economics, University of Stellenbosch)
Tourism flows are usually explained through demand-side factors such as income growth in developed economies and changes in the preferences of visitors. While these models are adequate for short-term forecasts, little theoretical justification is provided to explain why certain countries perform better than others. This paper identifies which countries have a comparative advantage in the export of travel services (tourism). Consequently, the paper seeks to identify the sources of this comparative advantage. We include the standard explanatory variables (factors of production, including natural environment) for Ricardian comparative advantage, plus measures of infrastructure, health, safety and security, tourism prioritization, and various dummy variables. We also develop and test new variables, including a neighbourhood variable, which measures the benefits obtained from regional tourism clusters. Our results have important policy implications; it is clear that the natural environment has a large positive and significant impact on a country’s revealed comparative advantage, as do transport endowments (a measure of relative accessibility) and the neighbourhood variable. These findings correspond to the predictions of the neoclassical trade theories (namely Heckscher-Ohlin) and to some extent the new trade theories (Krugman).
JEL Classification:F11
Keywords:tourism, comparative advantage, trade in services
Download: PDF (885 KB)Login
(for staff & registered students)
Upcoming Seminars
Monday 28 July 202512:00-13:00
Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
Topic: "TBC"
12:00-13:00
Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
12:00-13:00
Professor Johan Fourie: Stellenbosch University
Topic: "Economic History: TBC"
BER Weekly
25 Jul 2025 Budget hurdle cleared, but US tariff implementation remains a riskIt was another big week on the local political front, but with some constructive momentum. On the trade front, ahead of next week’s 1 August deadline, Trump announced another “massive” trade deal with Japan. The upcoming week is busy, with a slew of global and domestic data releases and several monetary policy decisions, including the SARB....
Read the full issue
Upcoming Seminars
Monday 28 July 202512:00-13:00
Dr Neil Rankin: Ceo Of Predictive Insights & Stellenbosch University
Topic: "TBC"
12:00-13:00
Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
12:00-13:00
Professor Johan Fourie: Stellenbosch University
Topic: "Economic History: TBC"
BER Weekly
25 Jul 2025 Budget hurdle cleared, but US tariff implementation remains a riskIt was another big week on the local political front, but with some constructive momentum. On the trade front, ahead of next week’s 1 August deadline, Trump announced another “massive” trade deal with Japan. The upcoming week is busy, with a slew of global and domestic data releases and several monetary policy decisions, including the SARB....
Read the full issue