Abstract:In the past 30 years, many studies have focused on exploring the relationship between tourism development and economic growth. However, there has been no consensus reached concerning of the relationship. This study will attempt to clarify the relationship between tourism development and economic growth. The purpose of this study is to analyze the relationship between tourism development and economic growth. This study applies the Panel Smooth Transition Regression Model (PSTR) proposed by Gonzalez et al. (2005) to investigate the regime-switching effect of tourism specialization on economic growth in Asia Pacific countries over the period 1996-2009. The results are as follows: (a) there were regime-switching effects of tourism specialization on economic growth; (b) the tourism specialization on economic growth has a better explanation for the effects of non-linear PSTR than linear PLS (Panel Least Squares); (c) in medium degree of tourism specialization countries (the value is between 0.0123~0.01663), tourism development has a significantly positive influence on economic growth, but consumption ability and investment ratios have a significantly negative influence on economic growth; (d) in low or high degree of tourism specialization countries (the value is below 0.0123 or above 0.01663), tourism development has a reduced influence on economic growth, and significantly positive influence on consumption ability and investment ratios. On the basis of these results, this study presents policy recommendations and areas for future research.

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This research applies a recently-developed nonlinear panel smooth transition regression (PSTR) model and takes into account the potential endogeneity biases to examine whether Environmental Kuznets Curve (EKC) exists in G7 countries over the period [1991][1992][1993][1994][1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008]. This research makes three contributions to the CO 2 emissions literature. First, we apply the panel smooth transition regression (PSTR) model of González et al. (2005) to investigate the relationship among CO 2 emissions per capita, energy use per capita, real gross fixed capital formation, real GDP per capita, and labor participation rate for G7 countries. Second, we complement the existing literature by simultaneously examining the impacts of energy use, real gross fixed capital formation, real GDP, and labor participation rate on CO 2 emissions and take into account endogenous determination of real GDP on the PSTR model for CO 2 emissions. Third, based on the characteristics of the PSTR model, we can consider the elasticity of CO 2 emissions changes with country and time to analyze the elasticity of heterogeneous countries and the potential impacts of structural breaks on the CO 2 emissions elasticity in the panel framework. Based on the elasticity of the CO 2 emissions with respect to real income per capita, the environmental quality is a necessary good in Japan, the UK, and the USA, but a luxury good in the rest of G7 countries. Thus, there exists an inverted U-shaped relationship between CO 2 emissions and real income per capita with the threshold value of US$20,488, which is endogenously determined. This finding supports the existence of EKC in G7 countries. In other words, our results confirm there exists the regime-switching effect of real income on CO 2 emissions in G7 countries.