The Response of the Tourism Industry to Global Economic Policy Uncertainty in Italy: Can the Solow Residual Enhance Sector Resilience?

Tourism is one of the most vulnerable industries to global economic policy uncertainty (EPU), exposing destinations to significant external risks. Identifying resilience indicators is essential to mitigate this vulnerability. While the economic growth literature documents highlight the role of multi-factor productivity (MFP) -the Solow residual, in the long-term growth process, its moderating effect on the EPU-tourism relationship remains underexplored. This study investigates the moderating role of MFP in mitigating the adverse effects of EPU on tourism demand in Italy. Using panel quantile regression on data from 38 countries in 2008–2020, the findings show that global EPU negatively impacts tourist arrivals and nights spent, whereas MFP positively influences tourism demand and significantly moderates the negative impact of EPU. The findings highlight the importance of enhancing productivity and technological advancement to foster tourism sector resilience against global economic disruptions.