Analyzing the Economic Impact of Tourism on Sustainable Regional Development: Kainuu Region, Finland

Abstract

Tourism has emerged as one of leading industry in shaping the global and regional economies due to its inherent potentials for Income generation, stimulating employment, and infrastructure development. Kainuu, the eastern peripheral region in Finland, has a high dynamic socioeconomic backdrop characterized with exceptionally appealing tourists’ spots, adventure sports, and cultural heritage, yet, due to limited scope for industry diversification, and uncertain intense weather conditions, seasonal variations disrupt the tourism driven multiplier effect hindering sustainability of the Regional development. Such a situation creates effects not only the lives of the locals both financially and socially but also raises questions on the long-term development of the region. With diverse ranging potential opportunities coupled with vulnerabilities, Kainuu becomes one of the most compelling case to be investigated for tourism driven economic multiplier effect, role of seasonality and sustainable regional development.

Employing secondary data driven explanatory research design, the study intended to deter-mine the impact of Tourism economics on Sustainable regional development through the mediation of Multiplier effect why catering for the moderation of seasonal demand variations. The data were collected from number of secondary data sources in Finland like statistics Finland, Visit Finland, and Kainuuliitto. Both descriptive and inferential analysis were applied. Zscores of the selected indicators were used for standardization of the measurement units. To test the relationships, correlation and regression analysis were applied, whereas Hayes macro model 4 and 1 were applied to test the mediation and moderation respectively.

Affirming the Tourism-Led Growth Hypothesis (TLGH) and regional multiplier theory, the study extends empirical evidence on tourism economic activity leading to Sustainable Regional Development through the mediation of Multiplier effect. Additionally, though not statistically significant for small sample size, seasonal demand variations, depict evidence of moderating the association between TEA and TME. The results also indicate the Kainuu tourism policy is rightly getting implemented through strategic initiatives, signifying multiplier effect, and minimizing seasonal demand variations with a focus on year round tourism demand creation through structural or policy interventions.