Is the Load Capacity Curve Hypothesis Valid for the Top Ten Tourism Destinations?

Abstract

Environmental deformations and changes put countries under socioeconomic stress at the global level and are, therefore, an essential topic of discussion. In this context, this paper analyzes the impact of financial development, tourism, and economic growth on three different environmental indicators using second-generation panel data techniques for the top ten tourism destinations. This study tests whether there is a U-shaped relationship between income and the load capacity factor and an inverse U-shaped link between carbon emissions, ecological footprint and income for the period 2004–2018. Despite the environmental Kuznets curve (EKC) hypothesis, which is often analyzed in this context, this empirical analysis investigates a new one—that of the load capacity curve (LCC) hypothesis. The results of the study show that the LCC and EKC hypotheses are not valid. The long-run panel estimators also indicate that international tourist arrivals are a factor that improves environmental quality, while financial development reduces the load capacity factor. Based on the results, it is recommended to support eco-friendly tourism for sustainable development.

Analyzing the nexus between environmental sustainability and clean energy for the USA

“…The factors above encompass facilitating technological advancements, implementing improved renewable energy systems, and gradually phasing out energy sources that generate significant carbon emissions. The gradual decrease in carbon emissions within the energy sector, facilitated by the widespread adoption of renewable energy sources, will play a crucial role in tackling climate change and reducing the overall carbon footprint of human activities(Pata 2023 ; Shahzad et al 2023 ). In analyzing the effect of the (R&D) and TI within the framework on environmental degradation, a multifaceted interplay of variables is observed to influence the CO 2 emissions.…”

The nexus between eco‐friendly technology and environmental degradation in India: Does the N or inverted N‐shape load capacity curve(LCC) hypothesis hold?

“…Few studies have tested the link between LCF and economic growth. For example, (Pata & Tanriover, 2023) assessed the validity of the LCC hypothesis in the case of the top ten tourism destinations, and the result highlights that there is no evidence for the validity of load capacity. However, (Dogan & Pata, 2022) proved the presence of the LCC hypothesis in G7 countries.…”

“…In this vein, it is possible to argue that eco‐friendly technology, economic growth, and energy consumption can significantly influence environmental quality. Thus, this study relies on the recently proposed “ LCC” hypothesis by (Adebayo et al, 2022; Pata & Kartal, 2022; Pata & Tanriover, 2023). It is an extension of the EKC developed by (Grossman & Krueger, 1991), stating the relationship between economic growth and environmental quality, which has three stages; due to the scale effect in the initial stages of economic growth, the pollution level increases, but the composition and technique effects come into the picture in the later stage of economic growth to overcome the pollution.…”

“…But, the prevailing literature on the LCC hypothesis exhibits three crucial elements as its shortcoming. First, the economic growth and square of economic growth have been studied by (Pata & Tanriover, 2023) for top tourist destinations and (Pata & Kartal, 2022) for South Korea while testing the LCC hypothesis. Nonetheless, these studies are not accommodating the cubic term of economic growth while forming the environmental degradation function.…”

Assessing the Environment From Both Supply and Demand Aspects in New Emerging Countries: The LCC and the EKC Approaches

“…Like the EKC approach, the LCC demonstrates how the LCF evolves in response to the economic expansion in a nation's development period [17].…”