Sustainability and Spatial Spillover Effects in the Eurozone’s Tourism Economic Performance: Evidence from Spatial Durbin Models

Abstract

This study investigates spatial dependence and cross-border spillover effects in the Eurozone tourism sector from 1996 to 2019. Fixed-effects Spatial Durbin Models (SDMs) are employed to distinguish within-country, cross-border spillover, and total effects. The analysis covers multiple dimensions of the tourism economy: business and leisure tourism spending, visitor exports, domestic tourism spending, internal travel and tourism consumption, tourism investments, and tourism’s employment contributions, and examines their spillover effects on international tourist arrivals. Moreover, it measures how environmental and energy-related proxies affect international tourism arrivals and capital investment spending at the interface of the demand and supply sides. This study provides a multidimensional assessment of how diverse tourism- and environmental-related determinants, accounting for spatial dependence, country heterogeneity, and structural breaks, apply to a highly integrated Eurozone tourism market. Despite its significance, the adopted set of variables is less observed and investigated in the relevant literature. The results indicate statistically significant positive spatial autoregressive dependence in most thematic SDM specifications, but not universally; it is statistically insignificant in the tourism–investment equation and only marginally significant in the visitor-exports specification. They indicate that tourism outcomes are associated with both within-country developments and cross-border interactions. Structural-break results further indicate a comparatively stable positive incremental regional component of the tourism–investment relationship after 2017, conditional on the earlier retained 2004 regime change, rather than an unequivocal increase in regional transmission. From a sustainability perspective, the spatial framework enables the simultaneous assessment of tourism development, energy requirements, and environmental pressures, helping to quantify how sustainability-related effects are distributed within and across Eurozone destinations. By identifying changes in these relationships across structural regimes, the analysis also provides evidence relevant to monitoring resource efficiency and supporting lower-impact tourism development over time. Research findings highlight the interconnectedness of Eurozone markets and support coordinated regional policies for cooperation and sustainable tourism development.