Does proximity to conflict affect tourism: Evidence from NATO bombing.

Marina Tkalec,Ivan Žilić,Shihe Fu

doi:10.1371/journal.pone.0258195

Abstract

Although conflict, war, violence, and terrorism affect tourism, research that identifies possible channels of these effects is scarce. We explore if the adverse effects are channelled through proximity to conflict areas. We use the conflict in Kosovo in 1999 and the country Croatia as a quasi-natural experiment and take advantage of the specific north-west to south-east orientation of Croatian Adriatic counties to identify the effect of NATO bombing in Kosovo on tourism outcomes as well as the potential proximity channel. Using data on the population of Croatian firms and the difference-in-differences identification strategy we find that tourism companies’ revenues decreased significantly due to NATO bombing, especially in accommodation services and in companies with 50 or more employees. However, using a synthetic control approach we find that the adverse effect is only transitory. Analysing heterogeneous effects with respect to the distance of the firm from Kosovo—using a linear and a more flexible model—we find compelling evidence that within-country proximity to conflict is not a significant channel through which the negative effect propagates.

Highlights

Tourism—an activity largely based on pleasant experiences—is fundamentally incompatible with conflict, war, violence, and terrorism
The validity of parallel trends enables us to estimate the causal effect of interest, we argue that the estimated object is a lower bound of the effect of NATO bombing on Croatian tourism
We establish the effect of NATO bombing on revenues of firms in the tourism sector

Summary

Introduction

Tourism—an activity largely based on pleasant experiences—is fundamentally incompatible with conflict, war, violence, and terrorism. According to the [1] the number of countries experiencing a terrorist attack in 2015 amounted up to 92 with 29,376 people dying during these terrorist events. When wars and other sorts of conflict are added, the number goes up by a high degree. While these horrific events are important issues on their own, it remains to see how they affect tourism. The following tourist season, 2000, in which the Kosovo-Serbia conflict ceased and 12 months after the NATO bombing, the number of tourist arrivals and overnight stays surpassed the level of 1999, but overshot the level of 1998, resulting in an annual increase in overnight stays amounting up to 12.057 million. After the end of the war in Croatia in 1995, arrivals and overnight

Methods

Results

Conclusion