The Influence of International Tourism on the Food, Drinks, and Tobacco Industry: Empirical Evidence from Mexico

ABSTRACT The development of the food, drink and tobacco industry (FDTI) is essential to ensure food security, generate employment, and increase production output. In this study, we analyse the relationship between international tourism and FDTI in Mexico. The study used three Autoregressive Distributed Lag models which provide evidence that tourism, whether measured by the number of arrivals or by average expenditure, has a positive effect on FDTI growth. The results also revealed that depreciation of the Mexican peso has a positive effect on FDTI. These results suggest that international tourism has the potential to boost agribusiness and development in rural areas.