An empiric on geopolitical risk and the tourism-economic growth nexus

This study empirically examines the moderating role of geopolitical risk on the tourism-economic growth nexus by applying a recent geopolitical risk indicator in a cross-country panel data growth model context. We employ a DVLS panel data model, nonparametric covariance matrix estimator and System GMM estimation techniques by accounting for unobserved country-specific and time-invariant effects. The research finds that the interaction term of geopolitical risk significantly contributes to the predictive ability of the regression and provides empirical evidence that confirms that only in low geopolitical risk countries international tourism positively and significantly contributes to economic growth. Important theoretical and policy implications flow from these findings.