Did the Grand Canal’s World Cultural Heritage inscription boost urban tourism? A quasi-experimental analysis from 86 Chinese cities

The conversion of cultural heritage into economic vitality represents a critical challenge in heritage conservation and development. The inscription of the Grand Canal as a UNESCO World Cultural Heritage site has created unprecedented opportunities and complex challenges for tourism in cities along its banks. This study quantitatively assesses the economic impact of this designation using a DID approach. We analyze a panel dataset covering 86 cities in 8 provinces (and municipalities) along the canal from 2004 to 2023 to determine the effect of the inscription on the tourism economy of heritage cities. Our findings reveal that, contrary to expectations, the World Cultural Heritage status did not significantly boost tourism revenue or tourist arrivals, but instead exerted a negative influence. We identify per capita disposable income and high environmental quality as consistent positive drivers of the regional tourism economy. Furthermore, heterogeneity analysis uncovers a nuanced picture: the World Cultural Heritage title acted as a ‘development dividend’ for economically robust cities, stimulating their tourism sector. In contrast, it imposed a significant negative shock on cities with low-to-moderate suitability for canal-based tourism. The mechanism analysis indicates that the inscription was associated with reduced fixed-asset investment in tourism and a limitation on inbound tourist flows. This study contributes empirical evidence to the intricate relationship between World Cultural Heritage status and regional economic outcomes, providing critical policy implications for heritage cities striving to balance conservation with sustainable development through differentiated strategies.