Interdependence of international tourism demand for Mediterranean countries: Impact of demand shocks

Abstract

Abstract Interdependence of tourism demand is an underexplored topic in tourism economics literature. Besides the traditional procedure of cross elasticities calculation, shock analysis could be used to investigate the interconnections of tourism flows. This paper conducts an econometric analysis of international tourism demand for 10 most developed Mediterranean destinations: Croatia, Cyprus, France, Greece, Italy, Malta, Morocco, Spain, Tunisia, and Turkey. In particular, a vector autoregression model is estimated for each pair of 10 countries. Impulse response functions are applied to investigate how a shock in tourism demand for one country impacts the tourism demand for its substitutes and complements.