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Exploring the Nexus of Economic Expansion, Tourist Inflows, and Environmental Sustainability in Europe

Author

Listed:
  • Roussel, Yannick
  • Audi, Marc
Abstract
The paper delves into the intricate relationship between economic growth, tourism arrivals, and climate change, focusing specifically on the European economy over the period 1990-2019 using panel data analysis. The empirical framework examines the interplay between these variables and sheds light on their implications for environmental sustainability and economic development. The econometric analysis reveals several noteworthy findings. Firstly, the equation assessing economic growth underscores the positive correlation between tourist arrivals, energy consumption, carbon dioxide emissions, openness to trade, and economic growth. These results align with the prevailing literature, highlighting the multifaceted drivers of economic expansion in the context of tourism and trade. However, the study diverges from conventional wisdom by challenging the notion of a strictly positive correlation between tourism and climate change. While previous research predominantly suggests a positive association, our findings suggest an alternative hypothesis, wherein tourist arrivals exhibit a negative correlation with climate change indicators. This nuanced perspective underscores the complex dynamics at play and emphasizes the need for further investigation into the environmental implications of tourism. Furthermore, the application of fixed effects and GMM-system techniques provides additional insights into the determinants of carbon dioxide emissions. Income per capita and energy consumption emerge as significant drivers of CO2 emissions, highlighting the role of economic prosperity and energy consumption patterns in shaping environmental outcomes. Interestingly, tourism arrivals and squared income per capita demonstrate a negative correlation with CO2 emissions, suggesting that higher levels of tourism and income per capita may mitigate environmental pressures. Additionally, the analysis of tourism arrival determinants reveals that income per capita, openness to trade, and energy consumption exert a positive effect on tourism arrivals. These findings underscore the role of economic prosperity, trade openness, and energy infrastructure in driving tourist inflows, highlighting the interconnectedness of economic and tourism dynamics. The paper contributes to the growing body of literature on the nexus between economic growth, tourism, and climate change, offering valuable insights for policymakers and stakeholders. By elucidating the complex relationships between these variables, the study informs evidence-based policy interventions aimed at promoting sustainable tourism practices and mitigating the environmental impact of economic growth. Ultimately, a holistic approach that balances economic development objectives with environmental stewardship is essential for fostering long-term prosperity and sustainability in the European economy and beyond.

Suggested Citation

  • Roussel, Yannick & Audi, Marc, 2024. "Exploring the Nexus of Economic Expansion, Tourist Inflows, and Environmental Sustainability in Europe," MPRA Paper 121529, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:121529
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    File URL: https://mpra.ub.uni-muenchen.de/121529/1/MPRA_paper_121529.pdf
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    References listed on IDEAS

    as
    1. Marc Audi & Marc Poulin & Amjad Ali, 2024. "Environmental Impact of Business Freedom and Renewable Energy: A Global Perspective," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 672-683, May.
    2. Marc Audi & Amjad Ali & Mohamad Kassem, 2020. "Greenhouse Gases: A Review of Losses and Benefits," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 403-418.
    3. Marc Audi & Amjad Ali, 2023. "The Role of Environmental Conditions and Purchasing Power Parity in Determining Quality of Life among Big Asian Cities," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 292-305, May.
    4. Niccolò Comerio & Fernanda Strozzi, 2019. "Tourism and its economic impact: A literature review using bibliometric tools," Tourism Economics, , vol. 25(1), pages 109-131, February.
    5. Amjad Ali & Marc Audi, 2016. "The Impact of Income Inequality, Environmental Degradation and Globalization on Life Expectancy in Pakistan: An Empirical Analysis," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 4(4), pages 182-193, April.
    6. Camelia Surugiu & Nuno Carlos Leitão & Marius Răzvan Surugiu, 2011. "A Panel Data Modelling of International Tourism Demand: Evidences for Romania," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 24(1), pages 134-145, January.
    7. Amjad Ali & Marc Audi, 2018. "Macroeconomic Environment and Taxes Revenues in Pakistan: An Application of ARDL Approach," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(1), pages 30-39, March.
    8. Tiago Neves Sequeira & Paulo Macas Nunes, 2008. "Does tourism influence economic growth? A dynamic panel data approach," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2431-2441.
    9. Marc Audi & Amjad Ali, 2023. "Unveiling the Role of Business Freedom to Determine Environmental Degradation in Developing Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 157-164, September.
    10. Davide Provenzano, 2020. "The migration–tourism nexus in the EU28," Tourism Economics, , vol. 26(8), pages 1374-1393, December.
    11. Amjad Ali & Marc Audi & Chan Bibi & Yannick Roussel, 2021. "The Impact of Gender Inequality and Environmental Degradation on Human Well-being in the Case of Pakistan: A Time Series Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 11(2), pages 92-99.
    12. Amjad Ali & Marc Audi & Yannick Roussel, 2021. "Natural Resources Depletion, Renewable Energy Consumption and Environmental Degradation: A Comparative Analysis of Developed and Developing World," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 251-260.
    13. Ben Jebli, Mehdi & Ben Youssef, Slim & Apergis, Nicholas, 2014. "The Dynamic Linkage between CO2 emissions, Economic Growth, Renewable Energy Consumption, Number of Tourist Arrivals and Trade," MPRA Paper 57261, University Library of Munich, Germany.
    14. Ali, Amjad & Sumaira, Sumaira & Siddique, Hafiz Muhammad Abubakar & Ashiq, Saima, 2023. "Impact of Economic Growth, Energy Consumption and Urbanization on Carbon Dioxide Emissions in the Kingdom of Saudi Arabia," MPRA Paper 118832, University Library of Munich, Germany.
    15. Michael Thorpe & Nuno Carlos Leitão, 2014. "Economic growth in Australia: globalisation, trade and foreign direct investment," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 16(1), pages 75-86.
    16. Claudio Calero & Lindsay W Turner, 2020. "Regional economic development and tourism: A literature review to highlight future directions for regional tourism research," Tourism Economics, , vol. 26(1), pages 3-26, February.
    17. Audi, Marc & Ali, Amjad, 2016. "Environmental Degradation, Energy consumption, Population Density and Economic Development in Lebanon: A time series Analysis (1971-2014)," MPRA Paper 82494, University Library of Munich, Germany, revised 2017.
    18. Aviral Kumar Tiwari & Ilhan Ozturk & M. Aruna, 2013. "Tourism, Energy Consumption and Climate Change in OECD Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 3(3), pages 247-261.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Alvi, Aramish Altaf & Audi, Marc & Ashiq, Rakhshanda, 2024. "Is indirect Taxes Bad for the Poor? Examining the Determinants of Poverty in Pakistan," MPRA Paper 121536, University Library of Munich, Germany.
    2. Dur-e-Shahwar & Dr. Fouzia Ashfaq & Maliha Khan, 2024. "The Impact of Visual Packaging Design on Perceived Food Product Quality and Brand Preference with Moderating Effect of Gender," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 714-719.
    3. Ayiza Arshad & Atif Khan Jadoon & Ambreen Sarwar & Maria Faiq Javaid, 2024. "Towards Asian Countries Sustainable Development: The Nexus between Information and Communication Technology, Energy Consumption and Carbon Dioxide Emission," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 1-8.
    4. Hijab Azhar & Laiba Asif & Tehreem Jehan & Hira Khurram & Javaria Asim, 2024. "Exploring the Drivers of Green Purchasing Behavior: Evidence from Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 93-101.
    5. Fiaz Ahmad Sulehri & Marc Audi & Marc Poulin & Amjad Ali, 2024. "Nexus between Innovation and Ecological Impact: A Moderated Mediation Investigation through Structural Equation Modeling Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 509-518, July.
    6. Sami Ullah Nagra & Sania Batool & Iqra Bashir & Dr. Muhammad Ayub, 2024. "Exploring the Dynamics of Trade in Developing Countries: A Panel ARDL Analysis of Renewable Electricity, Labor Force, and Economic Factors," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 418-423.
    7. Asif Khan & Madiha Awais & Kashif Bilal Majeed & Humaira Beenish & Muhammad Rashad, 2024. "Assessing the Impact of Technological Innovations and Trade Openness on Environmental Sustainability: An Empirical Study of South Asian Economies Using Panel ARDL Approach," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 243-250.
    8. Sehrish Arshad & Samittra Joseph & Saif Ur Rahman & Sadia Idress & Tanveer Ahmad Shahid, 2024. "Decarbonizing the Future: A Critical Review of Green Energy, Financial Inclusion and Trade Openness on CO2 Emissions," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 160-163.
    9. Ateeque Anwer, 2024. "How Oil Price Shocks Influence on Inflation Rate? Evidence from Malaysian Economy," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 350-356.
    10. Iftikhar Ahmad & Arifa Saeed & Muhammad Ibrahim Saeed & Clement Chiahemba Ajekwe, 2024. "Exports, FDI Inflows, Renewable Energy and Economic Growth: An Empirical Evidence from Singapore," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 850-856.
    11. Kausar Kiran & Dr. Muhammad Ali Gardezi, 2024. "Green Energy Strategies and Their Effect on Natural Resource Sustainability in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(2), pages 126-135.
    12. Audi, Marc, 2024. "A Discussion on the Role of International Regimes in Mitigating Global Warming and Climate Change," MPRA Paper 121586, University Library of Munich, Germany.

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    More about this item

    Keywords

    Carbon Dioxide Emissions; Energy Consumption; GMM-System Techniques; Income Per Capita;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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