How do foreign income shocks affect the magnitude of Spanish tourism?

This article analyses how income shocks in nine countries with major tourism flows to Spain affect the Spanish tourism arrivals for the period 2000–2017. To this end, we apply a Granger causality analysis based on augmented vector autoregressive (VAR) model in levels and extra lags. This provides more efficient and robust results than the standard VAR model that can lead to biased results with limited samples, especially in the country-by-country analysis. In this article, we present the first application of these econometric techniques in the field by studying the relationship between tourism and economic growth. Empirical results suggest that the impact of gross domestic product in the origin countries of inbound Spanish tourism is heterogeneous and country specific, and asymmetric behaviours appear among countries. The analysis of this issue is relevant for the design and implementation of tourism promotion programmes specific to the country of origin by policymakers and practitioners