Giving an example of pashmina, authors Jose
Guilherme Reis and Gonzalo Varlea discuss on ‘can tourism encourage better
export performance in diversification in Nepal’. The paper has highlighted the
importance of brining “fair” in the country without much expenses. The paper,
which has given a detailed description of the Nepal’s pashmina and firms’
behavior in the past, has following part:
Entering and successfully
surviving in export markets is a costly process for firms. Key steps for success
include learning about the existence of foreign demand, determining the
production costs of exportable goods, building a high-quality reputation,
succeeding in product branding to reduce competitive pressures, constant
upgrading of quality standards to better serve demanding international clients,
and remaining competitive with other players in the global marketplace. Drawing
on the findings of recent research (Reis and Varela 2013), this note argues that
tourism can help alleviate some of these costs by providing a relatively
inexpensive platform for cost discovery and acting as a low-cost in-house trade
fair, accessible to all domestic producers. Combining product-level data on the
world’s and Nepal’s exports (for goods that are both related and unrelated to
tourism) with Nepalese data on tourist inflows and expenditures and macro
indicators on relative prices results in a positive association between tourist
inflows from given destinations and their expenditures with future merchandise
exports of tourist-related products to those destinations. For goods previously
unrelated to tourism, data reveal no connection between tourism flows and their
future exports. The spillovers from tourism into merchandise export performance
and diversification imply that there are gains to be had from cooperation
between tourism and export promotion activities.
