The Spatial Threshold Effect of Tourism Specialization on Economic Development: A Case Study of China

ABSTRACT This study examines the spatial threshold effects of tourism specialization on regional economic development, focusing on how local, spatial spillover, and total regional effects vary across specialization regimes when spatial interactions are considered explicitly. Using panel data for 275 prefecture‐level cities in China from 2005 to 2019, we estimate a spatial panel Durbin–threshold regression model (SPD‐TRM) that integrates panel threshold regression with a spatial econometric framework. The results reveal significant threshold effects. The direct effects of TS on local economic development are consistently negative but weaken as specialization increases. In contrast, positive spatial spillover effects strengthen with specialization and outweigh the negative direct effects, resulting in positive and increasing total regional effects. These findings highlight the importance of spatial spillovers in assessing the economic contribution of TS and challenge previous findings of diminishing economic benefits at higher levels of specialization.