The Nexus between Tourism Sector Performance and Institutional Quality: Evidence from Ten Most-Visited Developing Countries

Abstract

The nexus between tourism sector performance and the quality of institution have been widely studied by several researchers. However, based on the knowledge of the authors of this study, no research has investigated the impact of institutional quality and trade openness as an economic institution on tourism development for most-visited developing countries. In this context, the target of this study was to empirically examine the link between the quality of the institutional structure and tourism sector development for 10 developing countries for the period 2001 to 2018. To achieve this objective, the panel data approach was preferred and adopted as it provides the advantage of including more observations. The results obtained indicate that an increment of 1% in trade volume and institutional quality increased tourism arrivals by 1.29% and 0.38%, respectively.