The effect of tourism investment on tourism development and CO2 emissions: empirical evidence from the EU nations

By S. Paramati, Md. Mahmudul Alam, Chi Keung Marco Lau. Journal of Sustainable Tourism, 2018

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Abstract The objective of this study is to investigate the effect of tourism investment on tourism development and CO2 emissions in a panel of 28 EU countries using annual data from 1990 to 2013. The empirical results from a panel cointegration test confirm the presence of long-run equilibrium relationship among the variables. The long-run elasticities indicate that tourism investment has a significant positive and negative impact on tourism development and CO2 emissions, respectively. Finally, the short-run heterogeneous panel non-causality test results show the evidence of bidirectional causality between tourism investment and tourism revenue. These results therefore suggest that tourism investments not only increase tourism revenue but also reduce CO2 emissions. Given these findings, we suggest the policy makers of the EU nations to initiate more effective policies to increase the tourism investments. The increasing tourism investments will allow the industry to grow further by ensuring sustainable tourism development across the EU member countries.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/e04838e1102f03404f9f0bd0f662dedfac365012

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