Title: Examining the Spillover Effect of Tourism Industry Agglomeration on High-Quality

Tourism Economy Development

Abstract

This study investigates how tourism industry agglomeration influences the high-quality
development of the economy. Using Chinese provincial panel data from 2005-2020, we examined
the effects of tourism industry agglomeration and spatial spillover on the high-quality development
of the tourism economy. The analysis incorporates various methods, including location entropy,
entropy method, ESDA method, and Spatial Durbin Model (SDM). Result indicates that both
tourism industry agglomeration and tourism economic high-quality development exhibit
significant spatial autocorrelation. The spatial correlation type of tourism economic high-quality
development is mainly characterized by H-H and L-L agglomeration. Furthermore, the high-level
areas of both agglomeration types display a trend of spreading to neighboring areas, with the
original agglomeration area serving as the center of this spatial evolution.

Keywords: tourism, industrial agglomeration; high quality tourism economy, ESDA, Spatial
Durbin Model (SDM)

1. Introduction

Tourism industry development in the modern era must emphasize both structure and speed. It
is important to prioritize high-quality tourism economy. The tourism industry is currently
undergoing a period of economic transformation. In this phase, it is essential to iteratively improve
the industrial structure. In addition, the concentration of the tourism industry in particular areas is
a crucial step in the process of achieving high-quality growth in the tourism economy. However,
while agglomeration accelerates economic growth, it also exacerbates regional development
imbalance and negative ecological externalities (Shi, Xu, & Xu, 2021). Meanwhile, with the rising
economic output value and social benefits of tourism in China, tourism has become one of the
important industries to promote the high-quality development of the regional economy (Shen,
Huang, Yin, & Hsu, 2022). Therefore, it is of great theoretical value and practical significance for
governments at all levels to formulate policies for the high-quality development of the tourism
economy by portraying the spatial distribution and evolution characteristics of the high-quality
development of the tourism economy and further clarifying the impact effect and spatial spillover
effect of the change of tourism industry agglomeration on the high-quality development of tourism
economy. High-quality development of the tourism economy not only refers to the total growth of
the tourism economy, but also includes the value judgment on the quality of tourism development
(the impact of tourism economic development on social benefits and environmental quality) in the
same period (Sghaier, Guizani, Ben Jabeur, & Nurunnabi, 2018). To promote the high-quality
development of the tourism economy, scholars have conducted many studies on the connotative
nature, spatial pattern, and influencing factors of tourism development quality. Conceptually,
Enright and Newton (2004) and Zhang (2022) evaluated the high-quality development of the
tourism economy from a qualitative perspective.

Based on the theory of the new economic geography, we constructed the spatial Durbin model
to investigate the impact of the change in the inter-provincial tourism industry agglomeration on
the high-quality development of the tourism economy in China. Given this, this paper explores
the spatial and temporal evolution pattern of the level of high-quality development of tourism
economy and its spatial agglomeration characteristics by using the ESDA method based on
measuring the level of high-quality development of China's provincial tourism industry
agglomeration and tourism economy from 2005 to 2020; secondly, based on the geospatial
dimension, we use the spatial Durbin model to explore the impact effect and spatial spillover effect
of the agglomeration of tourism industry on the high-quality development of the tourism economy.
Secondly, based on the geospatial dimension, we use the spatial Durbin model to explore the
impact and spillover effects of tourism industry agglomeration on the high-quality development of
the tourism economy, and then clarify the spatial transmission mechanism of tourism industry
agglomeration on the high-quality development of tourism economy, to provide scientific basis
for the central and local governments to formulate high-quality development policies of tourism
economy and build a mechanism of regional economic development cooperation.

2. Research Hypotheses

The concept of high-quality development of the tourism economy refers to a period-specific

evaluation of the quality of tourism economic development. It examines the growth of the overall
tourism economy and how the clustering of tourism industries can influence factors such as the
quality of the tourism economy, its environmental benefits, and its contribution to social well-
being. Wang et al. (2022) investigate how the spatial aggregation of various resource elements can
affect the high-quality growth of the tourism economy. According to the theory of new economic
geography, the clustering of the tourism industry can also have a positive effect on the quality of
development in neighboring regions. To comprehend the effects of tourism industry
agglomeration, it is necessary to examine both the direct and indirect effects on the quality growth
of the tourism economy.

Tourism industry agglomeration has the potential to attract the concentration of educational
institutions, research centers, and other essential resources and facilities. This promotes scientific
research, development, and innovation within the tourism industry. Thus, the efficiency of
technological innovation and economic outputs within the agglomeration area is enhanced, which
in turn facilitates the iterative upgrading of the structure of the tourism industry (Gan, Wang, Voda,
Jun Ye, and Chen, 2022). In terms of its effect on competition, tourism industry agglomeration
promotes the development of competitive dynamics among businesses. Thus, tourism businesses
with high inputs, high pollution, and low efficiency are gradually eliminated from the competitive
landscape. Tourism businesses are required to continuously engage in technological innovation
and optimize their management practices to increase production efficiency and reduce energy
consumption in order to maintain a competitive advantage. These initiatives contribute to the
overall improvement of the tourism economy's high-quality growth.

Hypothesis 1: Tourism industry agglomeration can have a positive direct effect on the high-quality
development of the local tourism economy through the economies of scale effect, technological
innovation effect and competition effect.

As far as spatial spillover effects are concerned, tourism industry agglomeration can
produce spatial spillover effects on the high-quality development of neighboring tourism
economies through technological spillover effects, sharing effects and siphoning effects. Due to
geographical proximity, the technology, knowledge and information of tourism enterprises in the
agglomeration area are more likely to spread to the neighboring areas, strengthening the
communication and learning between the neighboring areas and the agglomeration area in terms
of technology and knowledge of tourism enterprises, and improving the level of technological
innovation of the enterprises in the neighboring areas; at the same time, the sharing and diffusion
of knowledge and technology in the neighboring areas generates technological spillover effects,
especially the spillover and dissemination of consumption reduction and emission reduction
technologies in the tourism industry, and promotes the green development of tourism (Liu, Song,
Liu, & Chi, 2018). In addition, the geographical proximity of provinces is more conducive for
tourism enterprises to reach a consensus on cooperation and promote the synergistic development
of tourism economy, environment and society through the cross-regional formulation of relevant
institutional policies, thus promoting the high-quality development of the neighboring tourism
economy through the sharing of cooperation dividends (Shan & Ren, 2023).

Hypothesis 2: Tourism industry agglomeration can produce spatial spillover effects on the high-
quality development of the regional tourism economy through technology spillover effects, sharing
effects and siphoning effects.

Hypothesis 3: There is regional heterogeneity in the spatial spillover effects of tourism industry
agglomeration on the high-quality development of the regional tourism economy.

3. Research methodology

3.1 locational entropy

Location entropy is not limited by the size of the area, and it can reflect the spatial distribution
of elements more intuitively. Referring to the practice of scholars such as Huang & Dai (2021) and
Zhao, Huang (2022), the location entropy is chosen to characterize the degree of regional tourism
industry agglomeration, which is shown in equation (1).

TAit = (trit /𝑔𝑖𝑡 )/(𝑇𝑅𝑡 /𝐺𝑡 ) (1)

Where TAit characterizes the locational entropy of the tourism industry in province 𝑖 in year n;
trit characterizes the total tourism revenue in province i in year n; git characterises the gross
regional product (GRP) in province 𝑖 in year 𝑛5; TRt characterises the national total tourism
revenue in year n; and Gt characterises the GDP in year n.

3.2 Entropy method

The entropy value method determines the weights of the indicators based on the amount of
effective information contained in each indicator, so that the subjective factors generated in the
process of indicator selection and empowerment can be effectively avoided, and the scope of
application is wider. Referring to the research results of Yang & Shao (2023), the entropy method
is used to measure the level of high-quality development of tourism economy.

3.3 ESDA methodology

 The ESDA method measures the spatial correlation of the elements, and visually describes and
analyses their spatial distribution and correlation patterns, and its core points include the analysis
of global and local spatial autocorrelation (Hu, Yuan, Niu, Zhang, & Guan, 2022). Global spatial
autocorrelation is to measure the agglomeration or dispersion relationship between a certain
attribute value and the neighboring regions, which is widely used, and the global Moran's I index
is used to test the spatial correlation of the high-quality development of the tourism economy;
while local spatial autocorrelation is to measure the spatial location change of the local area, which
can more intuitively show the degree of aggregation of the high-quality development of the tourism
economy among the provinces and regions. The local Moran's I index is used to clarify the spatial
changes in the high-quality development of tourism economy (Shi, Xu, & Xu, 2021). The formula
is as follows:

𝑚 ∑𝑚 𝑚
𝑖=1 ∑𝑗≠1 Wij (𝑥𝑖 −𝑥̅ )(𝑥𝑗 −𝑥̅ )
𝐼= ∑𝑚 𝑚 𝑚 2 , (2)
𝑖=1 ∑𝑗≠1 Wij ∑𝑖=1 (𝑥𝑖 −𝑥̅ )

𝑚(𝑥𝑖 − 𝑥̅ ) ∑𝑚
𝑗=1 Wij (𝑥𝑗 − 𝑥̅ )
𝐼𝑖 = 𝑚 , (3)
∑𝑖=1 (𝑥𝑖 − 𝑥̅ )2

Where I and Ii represent the global and local Moran's I index of high-quality development of
tourism economy in provincial areas, respectively; xi and xj represent the high-quality development
of tourism economy in geographical unit i and region j, respectively; Wij is the neighboring spatial
weight matrix; 𝑚 and 𝑥̅ denote the value of spatial location and the mean value of high-quality
development of tourism economy in each province, respectively.

3.4 The Spatial Durbin Model

With the acceleration of regional economic integration, the tourism economy interacts with
each other in different regions, but the traditional panel model cannot reflect this spatial interaction.
The spatial panel model incorporates spatial factors into the study of high-quality development of
tourism economy, which can effectively eliminate the regression bias caused by spatial
autocorrelation, and is also conducive to the systematic consideration of spatial correlation and
spatial spillover effects (Haibo, Ke, Fangfang, & Ayamba, 2020). Based on this, the spatial Durbin
model is constructed to investigate the impact of tourism industry agglomeration on the high-
quality development of tourism economy.

𝑇𝐸𝐻𝑖𝑡 = 𝛼 + 𝜌WTEHit + 𝛽TAit + 𝛾WTAit + 𝜀Cit + 𝜃WCit + 𝜆𝑖 + 𝜔𝑡 + 𝜇𝑖𝑡 , (4)

Among them, TEHit is the core explanatory variable, indicating the level of high-quality
development of tourism economy in province 𝑖 in year 𝑡; TAit is the core explanatory variable,
indicating the level of tourism industry agglomeration in province i in year 𝑡; Cit is the control
variable; α denotes the constant term; 𝜌 and 𝛾 represent the spatial lag coefficients of high-quality
development of tourism economy and tourism industry agglomeration, respectively; W stands for
the neighbouring spatial weighting matrix; λi and ωt are the individual fixed effect and the time
fixed effect, respectively; and 𝜇 is the random perturbation term.

4. Conclusion
 This study examines the level of provincial tourism industry agglomeration and high-quality
development of China's tourism economy from 2005 to 2020 using the ESDA method. It
investigates the spatial-temporal evolution pattern and spatial agglomeration characteristics of
high-quality development. In addition, using the spatial Durbin model, the impact and spillover
effects of tourism industry agglomeration on high-quality development are investigated. First, we
observe a significant spatial autocorrelation between tourism industry agglomeration and high-
quality tourism economy development. The local area demonstrates a distinct pattern of
agglomeration in high-quality development, with H-H (high-high) and L-L (low-low)
agglomeration serving as the predominant forms of spatial correlation. In addition, the initial
agglomeration spreads to neighboring regions in the high-level regions. The direct and indirect
effects of tourism industry agglomeration on high-quality development are notably positive. This
indicates that tourism industry agglomeration not only drives the improvement of high-quality
development within the region, but also promotes such development in adjacent regions. Thirdly,
while improvements in transportation, economic development, and technological advancement all
contribute to varying degrees of high-quality development, technological advancement has a
negligible impact. Moreover, the intensity of carbon emissions from tourism significantly impedes
quality development. Economic development and the intensity of tourism carbon emissions exhibit
a strong positive spillover effect, while transportation improvements demonstrate a significant
negative spillover effect. Technological progress and openness to the outside world have a non-
significant spillover effect.

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