Geographical and Industrial Spillover Effects of Political Movement : Evidence from Tourism in Hong Kong and Macao

Spillover effects of tourism in neighboring regions have been the focus of scholars. Hong Kong and Macao, which are two adjacent regions famous for being a "shopping paradise" and "gambling paradise," respectively, enable us to examine the relationship between tourism industries with different specialities. Taking the 2014 Occupy Central movement of Hong Kong as a quasi-natural experiment, we identify the effect of political shock on tourism. Results indicate that the political shock had a negative impact on the number of visitors to Hong Kong and a spillover effect on Macao. Further analysis shows that a 1% change in demand for tourism in Hong Kong leads to a 0.863% change in that in Macao. As Macao is a world-famous gambling center, our study implies that complementarity, rather than substitution, exists between the gambling and general leisure and hospitality industries