Can nature promote development? The role of sustainable tourism for economic growth

Abstract

In this paper, we analyse whether biodiversity can enhance the developmental process in developing countries (DCs) by increasing tourism receipts in a trade-based endogenous growth framework. The model is based on the underlying assumption that a rich biodiversity provides a comparative advantage in sustainable tourism services. The empirical evidence shows that biodiversity while being significantly and positively correlated with inbound tourism receipts has no significant effect on tourist arrivals (mass tourism). This suggests that the biodiversity endowment of a very country is an important precondition for sustainable tourism. Moreover, we empirically show that specialising in sustainable tourism promotes economic growth. Therefore, a promising development strategy can rests on the investment into biodiversity which attracts high-budget tourists.