Tourism spatial spillover effects and urban economic growth

a r t i c l e i n f o Keywords: Prefecture-level administrative units Spatial spillover effect Urban economic growth Urban economic convergence The present study investigates the effect of tourism and its spatial correlation on urban economic growth. The study examines 272 prefecture-level administrative units between 2002 and 2011 in China as the sample and a β convergence model as the frame. The conclusions are that tourism development has a substantial impact on urban economic growth in China without decreasing the economic gap among cities. The tourism growth effect contributed primarily in the development of positive spatial correlation that led to spatial spill-overs—a large indirect effect; the direct effect of tourism on local economies was minimal. Introducing spatial correlation analysis of the relationship between tourism and urban economic development avoids reaching misleading conclusions and enables the analysis of both direct and indirect effects of tourism development. Tourism now is one of the fastest growing industries globally. Global tourist trips increased from 52.8 million in 1995 to 1.1 billion in 2013, with an average annual rate of increase of 4.34%. Asia and the Pacific Rim had the highest growth rates. China became the third biggest world travel market in 2013 with a total of 58 million visits (UNWTO, 2014). Furthermore, with the constant increase in disposable income and people's quality of life, the effective demand for casual trips is increasing continuously and rapidly in China. In 2013, vacation travel in China included 3.6 billion domestic trips, 3 billion more than the 0. Improvement of micro-level personal welfare is the final goal of social development, which is influenced by the economic development of a country. Thus, how much effect tourism development has on economic development is an unavoidable topic that needs to be addressed by relevant studies. Intuitive figures show that tourism has become an important part of the world's and China's economy. Increased tourism in 2013 made up 9% of the world GDP. At the same time, Chinese foreign tourism income reached 51.7 billion dollars, which was 2.33% of the total export and 24.55% of the total service exports (National Bureau of Statistics of China, 2013). Domestic tourism income reached 2.63 trillion Yuan, which was 4.62% of the GDP, with a 15.7% increase over the same period in 2012 (National Bureau of Statistics of China, 2013). However, although many studies have been published regarding the relationship between tourism and …