Business sentiment and international business travels : a cross-country analysis

This article investigates the effect of business confidence index (which is a measure of company managers’ optimism and pessimism toward their near-future business performance) on demand for international business travels. The model is empirically tested for 40 countries from 2004 to 2016. Using the first-difference generalized method of moments (GMM) estimation method, the results show that when managers of local businesses become more optimistic about their business performance, they travel more to other countries to search for more business opportunities in international markets. We also find that business confidence has a positive impact on outgoing business tourism expenditures. Our findings provide some important implications for tourism authorities and operators, macroeconomic policy makers, and airline managers.