Do pandemics have an asymmetric effect on tourism in Italy?
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Do pandemics have an asymmetric effect on tourism in Italy? Gizem Uzuner1 · Sudeshna Ghosh2 Accepted: 6 November 2020 © Springer Nature B.V. 2020
Abstract In this study, the asymmetric Granger causality relationship between tourist arrivals and world pandemic uncertainty index is examined by controlling inflation, consumer confidence index, and industrial production for the period 2000M1 and 2020M1 in Italy. To the best of our knowledge, the current study is one of the few studies to investigate the relationship between tourist arrivals and world pandemic uncertainty in an asymmetric framework. The empirical results show that using the Granger causality test in a linear framework causes bias results due to misspecification. Therefore, the study relies on asymmetric Granger causality test results which reveal that the positive shock of world pandemic uncertainty Granger causes a negative shock of tourist arrivals. It is suggested that international tourist arrivals are sensitive to external shocks such as pandemics and in such instances the government of the concerned country can insulate the tourism-service and hospitality industry against the shocks by developing strategies to promote full information between all stakeholders. Keywords Pandemics · COVID-19 · Tourism · World uncertainty index · Inflation · Consumer confidence index · Industrial production · Italy JEL Codes Z3 · E23 · E31
1 Introduction In the middle of December 2019, the city of Wuhan in central China first witnessed the epidemic which is familiar today as COVID-19. The disease spread across all countries and the World Health Organization (WHO) declared a situation of a public health emergency at the international level. As far as the spread of the pandemic outside the Asian region * Gizem Uzuner [email protected] Sudeshna Ghosh [email protected] 1
Faculty of Economics, Administrative and Social Sciences, Istanbul Gelisim University, Istanbul, Turkey
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Department of Economics, Scottish Church College, 1&3 Urquhart Square, University of Calcutta, Kolkata, West Bengal 700006, India
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is concerned Italy in Europe followed by Spain are the worst hit. As of 31, March 2020 the highest number of deaths globally owing to COVID-19 was in Italy. The Director of WHO urged all nations to take preventive measures to contain the virus which includes the imposition of social distancing and quarantine. With increasing restrictions on mobility, the economy is hovering under uncertainty and income losses. Since March 2020 the COVID-19 devasted the tourism industry, international tourism came to a standstill. Restrictions on travel, cancellation of flights, and closure of hotels have reduced the tourism business significantly. The Organization for Economic Cooperation and Development (OECD) fears that the pandemic would lead to a contraction of tourism industry around 60–80% in 2020, (Tourism Policy Responses to the coronavirus, COVID-19, OECD 2020). Such downswings in tourism demand were also
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