Dynamic relationship between tourism, economic growth, and environmental quality

Abstract

In the recent era of globalisation, the tourism sector is growing rapidly and stimulates economic growth across the world, however, the inevitable environmental consequences of tourism cannot be ignored. For sustainable tourism, it is necessary to understand the interrelationship between economic growth, tourism, and environmental quality. Hence, the objective of the current research is to investigate the dynamic relationship between tourism, economic growth, and CO₂ emissions from 1995 to 2014 in the context of BRICS economies. A group of econometric tests robust to heterogeneity and cross-sectional dependence is applied to achieve accurate and unbiased results. Empirical findings propose that tourism sector significantly encourages economic growth; however, tourism degrades the quality of the environment. Also, globalisation has a long-term relationship with economic growth but an insignificant relationship with CO₂ emissions. The long-term elasticities further recommend that investment stimulate economic growth and mitigate CO₂ emissions. Moreover, environmental Kuznets curve (EKC) holds in BRICS countries in its significance to tourism and globalisation. Finally, a heterogeneous panel non-causality test detects bi-directional causality between tourism receipts and CO₂ emissions. Moreover, tourism and investment in tourism Granger cause each other. Empirical findings direct towards important policy implications.

Keywords:

• BRICS countries
• dynamic seemingly unrelated regression
• economic growth
• globalisation
• tourism

Acknowledgment

We are thankful to the editor in chief and anonymous reviewers for their constructive comments that enhance the presentation of the paper. This study is supported by the National Science Fund for Distinguished Young Scholars (Reference No. 71625003), Yangtze River Distinguished Professor of MOE, National Key Research and Development Program of China (Reference No. 2016YFA0602504), National Natural Science Foundation of China (Reference No. 91746208, 71573016, 71403021,71521002, 71774014), Humanities and Social science Fund of Ministry of Education of China (Reference No. 17YJC630145), China Postdoctoral Science Foundation (Reference No. 2017M620648).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Danish is an associate professor at School of trade and economics, Guangdong University of foreign studies, Guangzhou china. He have completed Ph.D. degree in Business administration from the school management and economics, Beijing institute of technology Beijing (China). He is published several article in well reputed journal, Renewable and Sustainable Energy Reviews, Energy, Journal of cleaner production, and Energy Economics and Natural Hazards. His research interest are in the field of energy economic, econometric modelling and climate change.

Zhaohua Wang, Ph.D, professor and Doctoral Advisor of School of Management & Economics, Beijing Institute of Technology. He has been engaged in post-doctoral research work in Tsinghua University. Owing to his outstanding efforts in research work, he gained the chance in the program of "Beijing-funded Plan for Talents"," Funding Scheme for outstanding young teachers in Beijing Institute of Technology and “Program for New Century Excellent Talents in University” by MOE. He is the author of more than 90 research article and published several books. His research interests are in Energy and Environmental Management, Green Supply Chain and Reverse Logistics Management, Climate Change, Technical Innovation and Strategy. He has published paper in several high quality SCI and SCCI journals, Energy Economics, Energy, Applied Energy, Journal of cleaner production, Ecological Indicator, Renewable and sustainable energy review, Natural Hazards and many more.