The effect of terrorism on tourism: a panel data analysis

Abstract

This study examines the relationship between domestic and international terrorism and tourism arrivals. By collecting panel data on inbound Tourism Arrivals and Terrorism incidents for 25 countries from 1995 to 2020, we find that fatalities have a negative impact on the growth of arrivals of these countries, as also on the per capita GDP growth. The Dynamic Multiplier Functions have shown that these effects can last for even a year, displaying the importance of safety and stability for a country’s economic sector.