International Ecotourism and Economic Development in Central America and the Caribbean

Using annual data for the period 1995-2012 for seven Central American and Caribbean countries, six different open-economy growth models that allow for international (eco-) tourism are estimated using panel-data estimation techniques. The main result of the investigation is that not only international tourist arrivals per capita have a highly significant impact on real GDP per capita but also that five different sustainability indicators interacted with international tourism have a positive impact on economic development in addition to international tourism. Furthermore, quantile regression shows that lower and medium income deciles in particular benefit most from international (eco-) tourism. The results are complemented by very similar estimation results for a set of 12 Central American and Caribbean countries using two sustainability indicators only, thus corroborating the validity of the specification. In addition, control variables are also generally significant and feature the algebraic signs as expected from economic theory.