1 Tourism and trade in OECD countries. A dynamic heterogeneous panel data analysis María Santana-Gallego a , Francisco Ledesma-Rodríguez a , Jorge V. Pérez-Rodríguez b* a Facultad de Ciencias Económicas y Empresariales, University of La Laguna, 38071 La Laguna (Tenerife), SPAIN b Facultad de Ciencias Económicas y Empresariales, University of Las Palmas, 35017 Las Palmas (Gran Canaria), SPAIN Abstract This paper studies the empirical link between international tourism and trade. We apply dynamic heterogeneous panel data techniques to analyse both long-term and short-term relationship for the case study of OECD countries. This link is studied by estimating the cointegration vector and analysing the short and long-run causality between variables. The analysis recognises that inbound tourism can promote international trade and also that international flow of goods requires and may encourage tourist arrivals and departures. The statistical significance of this relationship supports the presence of business opportunities due to the potential complementary relationship between tourism and trade. The results suggest a short-run relationship between tourism and trade, and that these variables are cointegrated. Keywords: tourism flows, international trade, cointegration, causality, panel data * Corresponding author. E-mail address: jvperez@dmc.ulpgc.es . Tel: (+34) 928 458 222. Fax: (+34) 928 458 225.