Effects of Foreign Capital on Tourism: Evidence from Macao and Hong Kong

Title variants

EN

Effects of Foreign Capital on Tourism: Evidence from Macao and Hong Kong

RU

Влияние иностранного капитала на туризм – на примере Макао и Гонконга

• Languages of publication: EN

Abstracts

EN

Although most economists defend the positive role of foreign investors in tourism development, a number of tourism geography studies present divergent views on the local impact of foreign investment on host communities. To trace the issue to its root, a simple analytical framework has been developed to show that the effects of free capital mobility highly depend on the geographical size and degree of economic diversity of a tourism destination. In the case of a small tourism economy, liberal economic doctrines tend to shape host communities’ policy-making towards a higher degree of openness to foreign factors of production than is optimal. Therefore, policymakers should develop foreign investment policies based on a careful assessment of tourism’s impacts and bear in mind the need for sustainable development. Data and facts from Macao and Hong Kong lend support to our theoretical predications.

PL

Chociaż większość ekonomistów broni tezy o pozytywnym wpływie inwestycji zagranicznych na rozwój turystyki, wiele prac z zakresu geografii turystyki przedstawia różne poglądy na temat wpływu inwestycji zagranicznych na gospodarkę krajów docelowych. Za pomocą prostego modelu analitycznego autorzy pokazują, że efekty międzynarodowej mobilności kapitału zależą w dużym stopniu od rozmiarów i struktury gospodarki w krajach docelowych. W przypadku małego kraju nastawionego na turystykę liberalna doktryna ekonomiczna stara się nakłonić politykę gospodarczą w kierunku dużej otwartości gospodarki na przepływ czynników produkcji – w stopniu większym niż optymalny. Dlatego polityka rządu powinna opierać się na dokładnej ocenie wpływu tych inwestycji i wpływów z turystyki na gospodarkę kraju. Analiza empiryczna wspierająca te wnioski oparta jest na danych dotyczących dwóch punktów docelowych turystyki międzynarodowej: Makao i Hongkongu.

RU

Большинство экономистов защищает тезис о положительном влиянии иностранных инвестиций на развитие туризма, но ряд работ в области географии туризма представляет разные взгляды на тему их влияния на экономику посещаемых стран. С помощью простой аналитической модели авторы показывают, что эффекты международной мобильности капитала зависят в большой степени от размеров и структуры экономики в посещаемых странах. В случае малой страны, ориентированной на туризм, либеральная экономическая доктрина старается подтолкнуть экономическую политику в направлении большей открытости на приток факторов производства – в большей, чем оптимальной, степени. Поэтому политика правительства должна опираться на четкой оценке влияния этих инвестиций и поступлений от туризма на экономику страны. Эмпирический анализ, поддерживающий эти выводы опирается на данные, касающиеся двух пунктов международного туризма: Макао и Гонконга.

Keywords

EN

capital inflow; foreign expansion; local underinvestment; tourism; Hong Kong; Macao

• Publisher: Komitet Nauk Ekonomicznych PAN, Polskie Towarzystwo Ekonomiczne
• Journal: Ekonomista
• Year: 2019
• Issue: 2
• Pages: 243-254

Contributors

References

• Ahiakpor J.W., The Profits of Foreign Firms in a Less Developed Country: Ghana, “Journal of Development Economics” 1986, no. 22(2).
• Briassoulis H., Sustainable Tourism and the Question of the Commons, “Annals of Tourism Research” 2002, no. 29.
• Brohman J., New Directions in Tourism for Third World Development, “Annals of Tourism Research” 1996, no. 23.
• Chen L., Devereux J., Tourism and Welfare in Sub-Saharan Africa: A Theoretical Analysis, “Journal of African Economies” 1999, no. 8(2).
• Copeland B., Tourism, Welfare, and De-industrialization in a Small Open Economy, “Economica” 1991, no. 58.
• Corden W.M., Boom Sector and Dutch Disease Economics: Survey and Consolidation, “Oxford Economic Papers” 1984, no. 36(3).
• Corden W.M., Neary J.P., Booming Sector and De-industrialisation in a Small Open Economy, “The Economic Journal” 1982, no. 92.
• Das S., Foreign Direct Investment and the Relative Wage in a Developing Economy, “Journal of Development Economics” 2002, no. 67(1).
• Forsyth P., Dwyer L., Foreign Investment in Australian Tourism: A Framework for Analysis, “Journal of Tourism Studies” 2003, no. 14(1).
• Forsyth P., Dwyer L., Spurr R., Is Australian Tourism Suffering Dutch Disease? “Annals of Tourism Research” 2014, no. 46(1).
• Göymen K., Tourism and Governance in Turkey, “Annals of Tourism Research” 2000, no. 27.
• Hong Kong Census and Statistics Department, The Hong Kong Annual Digest of Statistics, 1998–2014.
• Hong Kong Census and Statistics Department, Hong Kong Statistics, http://www.censtatd.gov.hk/home/index.jsp
• Inchausti-Sintes F., Tourism: Economic Growth, Employment and Dutch Disease, “Annals of Tourism Research” 2015, no. 54(2).
• Izsak J., Parameter Dependence of Correlation between the Shannon Index and Members of Parametric Diversity Index Family, “Ecological Indicators” 2007, no. 7(1).
• Jarvis J., Kallas P., Estonian Tourism and the Accession Effect: The Impact of European Union Membership on the Contemporary Development Patterns of the Estonian Tourism Industry, “Tourism Geographies” 2008, no.10(4).
• Macao Statistics and Census Services, Yearbook of Statistics, 1998–2014.
• Macao Statistics and Census Services, Statistics, http://www.dsec.gov.mo/Home.aspx?lang=en-US
• Pratt S., The Economic Impact of Tourism in SIDS, “Annals of Tourism Research” 2015, no. 52(2).
• Sheng L., Taxing Tourism and Subsidizing Non-tourism: A Welfare-Enhancing Solution to ‘Dutch Disease’? “Tourism Management” 2011, no. 32(5).
• Sheng L., Effects of Foreign Expansion on Local Growth: The Case of Macao, “European Planning Studies” 2014, no. 22(10).
• Sheng L., Tsui Y.M., Casino Booms and Local Politics: The City of Macao, “Cities” 2009a, no. 26.
• Sheng L., Tsui Y.M., Taxing Tourism: Enhancing or Reducing Welfare? “Journal of Sustainable Tourism” 2009b, no. 17(5).
• Sheng L., Zhao W.B., Strategic Destination Management in the Face of Foreign Competition: The Case of Macao, “Journal of Travel & Tourism Marketing” 2016, no. 33(2).
• Tang S., Selvanathan E., Selvanathan S., The Relationship between Foreign Direct Investment and Tourism: Empirical Evidence from China, “Tourism Economics” 2007, no. 13(1).
• Wijnbergen S., Sweder W., The ‘Dutch Disease’: A Disease After All? “The Economic Journal” 1984, no. 373.
• Wilkinson P.F., Caribbean Cruise Tourism: Delusion? Illusion? “Tourism Geographies” 1999, no. 1.
• Willmore L.N., The Comparative Performance of Foreign and Domestic Firms in Brazil, “World Development” 1986, no. 14(4).