This finding is similar in spirit to Fischer and Gil Alana 2009 who find using

This finding is similar in spirit to fischer and gil

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This finding is similar in spirit to Fischer and Gil-Alana (2009) who find using time series techniques that German tourism in Spain leads to higher import demand for Spanish wines in Germany that lasts a few months. I do not find any effects coming from tourism for all other product groups. The first stage results confirm that the instrument yields the expected sign and the f-stats suggest that the instrument is valid in all regressions. (1) (2) (3) (4) (5) Food and Beverages industrial supplies capital goods Consumer goods nes primary processed log tourists -0.056 -0.256 0.154 -0.079 0.491*** (0.182) (0.209) (0.172) (0.218) (0.187) log GDP origin 0.075 0.612*** -0.129 0.337*** 0.174 (0.117) (0.122) (0.107) (0.121) (0.114) log real exch rate 0.021 0.153*** 0.001 0.049 -0.038 (0.041) (0.056) (0.043) (0.066) (0.056) RTA 0.206*** 0.092 0.257*** 0.156** -0.023 (0.059) (0.066) (0.056) (0.073) (0.066) GATT origin 0.360*** 0.537*** 0.495*** 0.389*** 0.374*** (0.057) (0.066) (0.055) (0.073) (0.071) Observations 62552 49822 57627 42538 46912 R 2 0.870 0.854 0.890 0.835 0.844 First Stage log casualties -0.028*** -0.033*** -0.031*** -0.032*** -0.032*** (0.002) (0.003) (0.002) (0.003) (0.003) F-stat first stage 64.01 64.44 67.32 50.60 54.31 Table 2. BEC product level results non-OECD exporters only. Tourist flows are instrumented using the number of casualties in the exporting country due to terrorist attacks. All regressions include country-pair ij and importer-year jt fixed effects. All variables are demeaned over the exporter dimension to account for exporter multi-lateral resistances. Standard errors are clustered by country-pair ij . Significance levels *p < 0.10, **p < 0.05, ***p < 0.01. To check whether tourism has lagged effects on the exports of product groups, I run the regressions at the product level using lagged tourist flows and instrument the latter 10
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using lagged number of casualties from terrorism. I present the results in Table B8. The results suggest that tourism has a lagged effect on consumer goods nes (such as cut- flowers, apparel, and some consumer electronics) with an elasticity of 0.59 - an increase of 10% in tourist flows at time t-1 leads to increase of 5.9% in the export of consumer goods nes at time t - and the coefficient estimate is statistically significant at the 1% significance level. I also estimate a lagged effect on primary foods and beverages (elasticity 0.43) and industrial supplies (elasticity 0.3) but with lower statistical significance, at 5% and 10% significance levels respectively. I do not find a lagged effect of tourism on processed food products similar to the level effect found in Table 2. This is also in line with the finding of Fischer and Gil-Alana (2009) that the effect of tourism on Spanish wines is short-lived and only lasts for a few months. I test for the robustness of the results to including business travel in the tourist flows. Recall that I restrict the data to exclude business travel as described in Section 2. This does not change the result I find in Table 2; tourist flows affect processed food and beverages only and the coefficient estimate is slightly higher (0.55) and still significant at the 1% significance level. The higher coefficient suggests that there is an additional effect of business travel on the export of processed food and beverages but this additional effect does not extend to other product groups. I also control whether the results are
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