How to Create a New Holiday Destination? An Evaluation of Local Public Investment for Supporting Tourism Industry

  • Martin T. W. Rosenfeld
  • Albrecht Kauffmann


This paper reports on an empirical study for the East German state of Saxony. A strong de-industrialization took place in many regions in Saxony following the German reunification. Since the 1990s tourism has been one major area in Saxony where new local public infrastructure has been created. The question is whether this newly-built tourism infrastructure has been able to change the path of economic development in those municipalities where the investment has occurred. Is it possible to activate the tourism industry with the help of public investment at locations that are completely new to the tourism industry? The econometric estimations and a survey of businesses in the field of tourism make it clear that the new tourist infrastructure really did have a positive effect on local employment – but not everywhere and not in every case. Tourist infrastructure will only have a major positive impact on economic development if a municipality already has a “track record” of being a tourist destination and is well-equipped with the relevant complementary factors for tourist activities and the “primary features” of tourist destinations. This indicates that a local tradition in the area of tourism is one condition for the economic success of new public infrastructure. From a more general point of view, this seems to be an example of path-dependency in local economic development.


Tourism Industry Food Service Local Economic Development Local Unit Overnight Stay 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Department of Urban EconomicsThe Halle Institute for Economic Research (IWH)Halle an der SaaleGermany

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