Dynamic Panel Data Analysis of the Relationship between Economic Freedom and Tourism

Abstract

This paper explores the dynamic relationship between economic freedom and the tourism industry while controlling for the potential heterogeneity. Countries that report high levels of economic freedom index tend to have a more favorable business climate that increases the stability of the labor market; monetary system and rule of law. As a consequence, it can attract more investments in different sectors including the tourism industry. Thereby, economic freedom is expected to cause the tourism industry. Herein, we have explored the link of interest by collecting the balanced panel data for 87 countries over the period 2002-2015. The methodology includes the panel VAR model. The findings of this article suggest a unidirectional link running from economic freedom to the tourism industry. Given the importance of the tourism industry, this paper suggests that governments should make necessary changes to foster economic freedom since it is found to be an important factor to attract foreign tourists.

Employing the Panel Quantile Regression Approach to Examine the Role of Natural Resources in Achieving Environmental Sustainability: Does Globalization Create Some Difference?

“…This, in turn, intensifies the emission of greenhouse gases and over-exploitation of natural resources. Hence, excessive population growth contributes to increased environmental degradation [47,48] by fostering energy consumption implying that the predicted sign of β 2 is positive (i.e., ∂FPEC ∂PRLF > 0). One of the main factors in producing anthropogenic emissions is energy use.…”

The Role of Energy Transition and International Tourism in Mitigating Environmental Degradation: Evidence from SEE Countries

“…Additionally, while an increasing number of economists are showing considerable interest in the association between energy use, economic welfare and environmental quality, fairly limited studies have examined this interrelation when considering international tourism and energy transition [15]. Given that the tourism sector has been acknowledged as one of the most energy-intensive sectors, an emerging number of studies have extensively analysed its role in environmental degradation [16][17][18][19][20][21][22].…”