The Effects of Tourism on Economic Growth and CO₂ Emissions: A Comparison between Developed and Developing Economies

Abstract

The objective of this study is to empirically examine the effect of tourism on economic growth and CO2 emissions across the panels of developed and developing economies around the world.The study also investigates the Environmental Kuznets Curve (EKC) hypothesis between tourism revenue and CO2 emissions. To achieve these objectives, study employs robust panel econometric techniques on balanced panel data sets of developed and developing economies.The cointegration test results confirm the long-run equilibrium relationship among the variables. Similarly, the long-run elasticities indicate that tourism has a significant positive impact on economic growth and CO2 emissions of both developed and developing economies.The results also imply the presence of EKC hypothesis between tourism and CO2 emissions.More specifically, our results indicate that after a threshold point the contribution of tourism to the CO2 emissions is negligible, and the reduction is much greater in developed economies than those of developing economies. Overall, our findings reveal that tourism plays a significant role in stimulating economic development and prosperity; though it increases CO2 emissions.However, the effect of tourism on the CO2 emissions can be minimized by adopting more sustainable tourism policies and efficient management across developed and developing economies.

The Impact of Tourism Quality on Economic Development and Environment: Evidence from Mediterranean Countries

“…For instance, our results establish tourism-led growth hypothesis, i.e., the income level of a country's tourist arrivals positively contributes to economic growth. Our results confirm the tourism-led-growth hypothesis and are also consistent with the previous empirical studies [5,23], which document that the tourism has a significant positive impact on economic growth. Therefore, to ensure a solid growth performance, the policymakers in these countries can implement some policies to upgrade the income level of a country's tourist arrivals.…”

“…The authors have concluded that tourism has a positive and important contribution to economic growth for the country group, including China, France, Germany, Italy, Mexico, Russia, Spain, Turkey, the United Kingdom, and the United States. Another recent study, by [23], has confirmed that tourism has a considerable positive impact on economic growth across the panels of developed and developing economies around the world. Several previous studies [24,25] also highlight the issue of overtourism, though our focus in this paper is to empirically examine the impact of tourism quality on economic development and environment.…”

Revisiting the Dynamics of Tourism, Economic Growth, and Environmental Pollutants in the Emerging Economies—Sustainable Tourism Policy Implications

“…Katircioglu [10] applied a trivariate framework and found that tourism development in Turkey contributes to high energy consumption and carbon dioxide emanations. Paramati, Alam [52] found that tourism impact on carbon dioxide emanations is faster in developing than advanced economies. Although a considerable number of studies suggest that tourism contributes to CO 2 emissions, yet few studies also suggest the opposite, i.e., CO 2 emissions decrease tourist arrivals [53].…”

Analysis and Prediction of the Coupling Coordination Relationship between Tourism and Air Environment: Yangtze River Economic Zone in China as Example

“…Tourism stimulates air environmental changes in a positive way and also is affected by such changes [29]. For instance, 1% of increase in tourism revenue contributes to the 0.105% reduction of CO 2 emissions [30], and the developing countries have slower reduction speeds than the developed countries [31]. Furthermore, being considered as the low-carbon industry [32], tourism activities contribute to the upgrade of industrial structures and the renewal of urban functions, which helps better air environment protection [33,34].…”