The tourism in Latin America and Caribbean: A Panel VAR evidence

Abstract

In the late twentieth century, the increase in globalization was vital for the tourism industry. The tourism industry is commonly understood as essential for several economies. In this study, through a Panel Vector Autoregressive composed of 26 countries in Latin America and the Caribbean, there was a relationship between the Gross Domestic Product of tourism, the Gross Domestic Product, the decomposition of the KOF Globalization Index (social, economic, and political), public investment, the exchange rate, and the population. The time horizon for the empirical analysis comprises annual information from 1995 to 2015. The results show a bidirectional relationship between social globalization and public investment. In addition, evidence shows other important results: Gross Domestic Product and Gross Domestic Product of tourism, Gross Domestic Product of tourism and public investment, and Gross Domestic Product and public investment. The empirical results contribute to the discussions on tourism in Latin America and the Caribbean, providing a theoretical basis that contributes to the decision- making of public and private agents.