Abstract
This paper tests the visa-led tourism hypothesis which contends that easing of visa restrictions increases international tourism. Israel acts as a natural laboratory in this case with clear before and after junctures in visa restrictions. We use panel data on tourism to Israel from 60 countries during 1994–2012. In contrast to previous work we take account of nonstationarity in the data and test for the effect of multilateral resistance on tourism. Partial waivers of visa restrictions are estimated to increase tourism by 48 % and complete waivers increase tourism by 118 %. Other results include the adverse effect of Israel’s security situation on tourism, the beneficial effect of real devaluation on tourism, and the fact that the elasticity of tourism to Israel with respect to tourism to all destinations is very small.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
As the dummy variable for visas is 0, 1 or 2, a partial waiver reduces this variable by 1 and a full waiver by 2. This is multiplied by the estimated coefficient and the antilog of the result is taken.
References
Anderson, J., van Wincoop, E.: Trade costs. J. Econ. Lit. 42, 691–751 (2004)
Anselin, L.: Spatial Econometrics: Methods and Models. Kluwer Academic Publishers, Dordrecht (1988)
Artal-Tur, A., Pallardo-Lopez, V.J., Requena-Silvente, F.: Examining the impact of visa restrictions on international tourist flows using panel data. http://www.uibcongres.org/imgdb//archivo_dpo12679.pdf (2013)
Banerjee, A., Carrion-I-Silvestre, J.L.: Testing for panel cointegration using common correlated effects estimators. Department of Economics Discussion Paper, 11–16. University of Birmingham, Birmingham (2011)
Banerjee, A., Carrion-I-Silvestre, J.L.: Cointegration in panel data with structural breaks and cross-section dependence. J. Appl. Econom. (2013). doi:10.1002/jae.2348
Bertoli, S., Fernandez-Huertas Moraga, J.: Visa Policies, Networks and the Cliff at the Border. http://documentos.fedea.net/pubs/dt/2012/dt-2012-12.pdf (2012)
Bertoli, S., Fernandez-Huertas Moraga, J.: Multilateral resistance to migration. J. Dev. Econ. 102, 79–100 (2013)
BOI: The Impact of Terrorism, Israel’s Image and Economic Variables on Different Types of Incoming Tourism. In: Review of Recent Economic Developments, #137, Research Department, Bank of Israel, Jerusalem, pp. 37–46 (2014)
Chudik, A., Pesaran, M.H., Tosetti, E.: Weak and strong cross-section dependence and estimation of large panels. Econom. J. 14, C45–C90 (2011)
CBS: Tourism 2011, Publication No. 1503, Jerusalem. http://www.cbs.gov.il/publications12/1503_tayarut_2011/pdf/e_print.pdf (2012)
Eckstein, Z., Tsiddon, D.: Macroeconomic consequences of terror: theory and the case of Israel. J. Monet. Econ. 51, 971–1002 (2004)
Fleischer, A., Buccola, S.: War, terror and the tourism market in Israel. Appl. Econ. 34, 1335–1343 (2002)
Freeman, D., Sultan, E.: The economic impact of tourism in Israel: a multi-regional input-output analysis. Tour. Econ. 3(4), 341–359 (1997)
Gil-Pareja, S., Llorca-Vivero, R., Martínez-Serrano, J.A.: The impact of embassies and consulates on tourism. Tour. Manag. 28(2), 355–360 (2007)
Gould, E.D., Klor, E.F.: Does terrorism work? Q. J. Econ. 125(4), 1459–1510 (2010)
Im, K., Pesaran, M.H., Shin, Y.: Testing for unit roots in heterogeneous panels. J. Econom. 115(1), 53–74 (2003)
Jaeger, D.A., Paserman, M.D.: The Cycle of violence? An empirical analysis of fatalities in the Palestinian-Israeli conflict. Am. Econ. Rev. 98, 1591–1604 (2008)
Marrocu, E., Paci, R.: They arrive with new information: tourism flows and production efficiency in the European regions. Tour. Manag. 32, 750–758 (2011)
Neumayer, E.: Unequal access to foreign spaces: How states use visa restrictions to regulate mobility in a globalised world. Trans. Br. Inst. Geogr. 31, 72–84 (2006)
Neumayer, E.: Visa restrictions and bilateral travel. Prof. Geogr. 62(2), 171–181 (2010)
Neumayer, E.: On the detrimental impact of visa restrictions on bilateral trade and foreign direct investment. Appl. Geogr. 31(3), 901–907 (2011)
Pedroni, P.: Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxf. Bull. Econ. Stat. 61(4), 653–670 (1999)
Pedroni, P.: Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econ. Theory 20, 597–625 (2004)
Pesaran, M.H.: Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica 74(4), 967–1012 (2006)
Pesaran, M.H.: A simple panel unit root test in the presence of cross-section dependence. J. Appl. Econ. 22, 265–312 (2007)
Pesaran, M.H.: Testing weak cross-sectional dependence in large panels. Econom. Rev. 34(6–10), 1088–1116 (2015)
Westerlund, J., Edgerton, D.: A simple test for cointegration in dependent panels with structural breaks. Oxf. Bull. Econ. Stat. 70, 665–703 (2008)
WTTC: Travel and Tourism Economic Impact 2012. World Travel and Tourism Council, London. http://www.wttc.org (2013)
Author information
Authors and Affiliations
Corresponding author
Data appendix
Data appendix
We use panel data (1994–2012) for the econometric analysis. This is assembled from a variety of sources as follows:
International tourist arrivals (Y): Annual data on tourists entering Israel is published by the Israeli Central Bureau of Statistics (CBS 2012Felsenstein). http://www.cbs.gov.il/publications12/1503_tayarut_2011/pdf/e_print.pdf. Since 1994, this is available by country of origin, for selected countries. Our data relate to 60 countries that serve as origins over this period.
International outbound tourism from origin Countries (T): the source of this panel data is World Bank Data (http://data.worldbank.org/indicator/ST.INT.DPRT). This variable captures the extent of international travel at the origin.
Visa agreements (V): this is panel data constructed from the Israeli Ministry of Foreign Affairs Bilateral agreements data base: http://mfa.gov.il/MFA/AboutTheMinistry/LegalTreaties/Pages/Bilateral-Treaties.aspx. This source flags all bilateral visa agreements signed between Israel and other countries and the year in which the visa waivers went into effect. This data relates to 60 countries and is coded as 0=automatic visa waiver, 1=visa approved in local consulate, 2=visa approved in Jerusalem only.
Security situation (S): The source of this annual data is the National Insurance Institute. http://www.btl.gov.il/English%20Homepage/Publications/AnnualSurvey/Pages/default.aspx. The data counts number of security incidents, some of which might result in damage and not result in persons injured or killed. It thus measures magnitude rather than intensity.
Real exchange rate (r): The source is: http://data.worldbank.org/indicator/PA.NUS.PPP/countries?display=default. The ratio of this index to the Shekel-Dollar exchange rate gives the PPP value of one shekel in the tourists’ own currency.
Global tourism (GT): The source is the World Bank as above for International Outbound Tourism.
Global tourism receipts (GTR): Global receipts from tourism (1994–2012 in constant $US (bn) where 2005=100. The source is UNWTO(2012) World Tourism Barometer, Tourism Highlights, http://mkt.unwto.org/en/publication/unwto-tourism-highlights-2013-edition.
Rights and permissions
About this article
Cite this article
Beenstock, M., Felsenstein, D. & Rubin, Z. Visa waivers, multilateral resistance and international tourism: some evidence from Israel. Lett Spat Resour Sci 8, 357–371 (2015). https://doi.org/10.1007/s12076-015-0137-3
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12076-015-0137-3