Dynamics of Trade, Tourism, and Economic Activity: A Study of European Countries

Abstract

This paper analyzes the dynamics of trade, tourism, and economic activity, as well as the factors that contribute to the development of these dynamics in European countries. The study aims to investigate the relationship between tourism, economic activity, trade, and several other factors that influence trade and economic activity, such as capital and logistics. This implies that the model used represents a "system of relationships", and when the focus of the study is on modeling a complex causal system, the use of structural equation modeling is very valuable. For this reason, this study uses structural equation modeling. The data for the variables used in the study pertains to European countries and is organized in cross-section. In the conclusion, we will see that the development of tourism would stimulate the economic activity of countries. The paper also highlights the importance of initiatives to improve infrastructure and capital in countries as factors that positively impact trade by promoting the development of economic activity.