Tourism development and regional production efficiency: Evidence from southwestern China

This study examines the relationship between the production efficiency of a region and tourism flows. We use stochastic frontier production models with spatial effects based on data from 46 regions in southwestern China, most of which are economically underdeveloped. The results show that tourist flows (TFs) into a region are significantly related to the region’s production efficiency. The TFs in the neighboring regions also correlate with the production efficiency of a region. This study validates the tourism-led efficiency enhancement proposition at the regional level and has rich implications for practice.