The influence of information technologies and international tourism on trade

Abstract

This study investigates the influence of international tourism on trade activities in the context of the information technology age. In particular, the effects of international (arrival) and outbound tourists on trade, exports, imports, and sub-sectors (goods, manufacturing, merchandise, and total goods and services) and, notably, the catalytic role of the Internet (and mobile usage) are analysed. The study applies a robust twostep system generalized method of moments (GMM) estimate for panel data on 81 economies from 2002 to 2017 show interesting findings. First, the positive effects of international tourism on trade activities are reaffirmed. Second, the development of information technology appears to reduce these positive effects. The results may imply that information technology changes the demand components in international travel: decrease in business trips and increase in non-business trips consistent with the reduction in communication and transaction costs.