Does Formula-1 Grand Prix Attract Tourists?

Why would a country like Malaysia relinquish a glamorous spot in the Formula-1 Grand Prix calendar? Doesn’t this popular sport attract tourists? Previous research has examined the impact of large sporting events like the Olympics and the football World Cup on tourism inflows, but research on whether international sporting events held annually in the same city/country also attract significant number of tourists is limited. In this article we examine the above questions empirically and find that the hosting of a Formula-1 event indeed attracts tourists, an increase of about 6%, on average. We also find that street races, on the margin, attract more tourists. Our findings call policy makers to be absolutely certain before they give up their spot in the F1 calendar.