Tourism flows and trade theory: a panel data analysis with the gravity model

International trade represents the transnational flow of merchandise, while international tourism is the flow of humans from one country to another. This paper analyzes the trade and tourism flows to assess whether typical trade theories can be a theoretical basis in explaining tourism flow. Using a panel data analysis approach, this paper examines the gravity model and the Linder hypothesis regarding the two international flows in Korea. The empirical results provide evidence supporting the gravity model in terms of applicability and robustness to the flow of trade and tourism. The Linder hypothesis, however, fails to have the same result. Based on the gravity model, this paper elucidates a general explanation about the patterns of international tourism flows.