Inter-municipal cooperation in the case of spillovers: evidence from Western German municipalities

This paper examines the question: Does the existence of regional spillovers have an impact on the emergence of inter-municipal cooperation (IMC) in tourism marketing? We use data from a survey conducted among Western German municipalities merged with official statistics regarding municipalities’ fiscal, political and demographic situation, as well as tourism-related characteristics. We are the first to apply a hazard model explaining the emergence of IMC. This method has serious advantages over the previously used methods. Surprisingly, our results show that especially municipalities with the opportunity to free ride start IMC more likely than municipalities without this opportunity. Apparently, under certain circumstances, municipalities are better off starting IMC than free riding.