Public investment and tourism development: short-term evidence from French and Spanish regions

Abstract Tourism constitutes a key driver of regional economic development, integrating diverse industries and fostering socio-economic growth. Acknowledging the strategic importance of public intervention in enhancing tourism development and competitiveness, this paper employs a disaggregated, dynamic panel analysis across two major EU tourism economies to isolate the effects of thematically classified public investments, according to the objectives of the European Regional Development Fund (ERDF) 2014–2020 programming period, on tourism performance. This study provides evidence on the short-term associations between finalized ERDF investments and regional tourism development, as measured by the Gross Value Added (GVA). The findings reveal that investments in connectivity infrastructure have a significant and positive influence on regional tourism outcomes. In contrast, other ERDF-funded initiatives did not exhibit immediate measurable effects, likely due to their broader or longer-term objectives. The results provide a nuanced understanding of the relationship between specific types of public investment and tourism dynamics, offering actionable insights for policymakers seeking to optimize resource allocation and promote sustainable regional development.