Agência para o Investimento e Comércio Externo de Portugal


Despite of tourism being one of the most volatile sectors in periods of high uncertainty, results show a higher survival resilience among established tourism associated firms.


Economics in a picture: Resilience among established tourism associated firms is higher when compared to firms in other activities


The figure represents the predicted hazard for each group-specific average firm comparing four groups of activities: (1) Manufacturing, 2) Other Services (excludes all tourism related activities), 3)  Partly Tourism (includes firms which provide services to natives but whose business activity is influenced by tourism flows, such as restaurants, bars and transports, and 4) Mainly Tourism (includes firms whose activities are offered mostly to tourists, such as travel agencies and hotels).


The evidence on the relation between firm age and the probability of exit is different between the four groups, particularly in the first 15 years. The observed patterns are also not identical for the two sectors with activities offered to tourists. The probability of exit decreases overtime in the case of firms that are partially linked to tourism (it is the group of firms with the highest likelihood in the first 13 years), while for firms whose activities are offered mostly to tourists the probabilities are relatively stable and the lowest among the four groups. Overall, conditional on surviving more than 10 years empirical results show that Tourism firms have on average a higher probability of survival than Manufacturing and Other Services’ firms.


For further details see Caires, Reis and Rodrigues (2022), “Survival of the fittest: Tourism Exposure and Firm Survival”, Working Paper No 6, Banco de Portugal.