The Productivity Puzzle in Cultural Tourism at Regional Level

Abstract

The distribution of labour productivity of tourism firms across regions has not received considerable attention until now. To address this concern, an empirical analysis at firm level is used to calculate the labour productivity across seven Portuguese NUTS II regions. Using data from 2866 firms’ financial reports obtained from SABI database, over four years, this paper analyses the regional inequalities and its consequences in terms of economic and tourism development. The findings show that, at the national level, the mean labour productivity has increased around 1.9% on average from 2015 to 2017 and dropped 3.9% in 2018. At the regional level, the results suggest that firm performance regarding productivity is not related to the dynamics observed in neighbouring regions but to the resources and conditions available in each region separately. Such results confirm the assumption of spatial inequality in the distribution of labour productivity among cultural tourism firms. The results presented in the article can be of significant use to further understand the productivity dimension of tourism production at regional level. Finally, by identifying the areas where tourism management needs to be improved, this paper provides suggestions on measures to increase regional productivity and thus regional competitiveness.