Drivers of comparative advantages in tourism: The eu-case

Algieri et al enlarge the analysis to the EU-28 economies providing a more comprehensive indicator of comparative advantages and of their drivers and explores the determinants of comparative advantages in tourism drawing from the traditional and new trade theory and extends the original Balassa index (1965) to include tourism exports and imports to measure advantages. The results (Table 2) show that both natural environment and cultural and historical heritage are significant in explaining comparative advantages in tourism. Additionally they indicate that, ceteris pan bus, comparative advantages in tourism are negatively associated with the overall efficiency of the country and an increase in productivity by 1% reduces comparative advantages by a range of 0.3-0.4%.