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

Sudharshan Reddy Paramati (Lead / Corresponding author), Md. Samsul Alam, Chi Keung Marco Lau

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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 1990-2013. 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.
    Original languageEnglish
    Pages (from-to)1587-1607
    Number of pages21
    JournalJournal of Sustainable Tourism
    Volume26
    Issue number9
    Early online date15 Oct 2018
    DOIs
    Publication statusPublished - 2018

    Keywords

    • CO emissions
    • Sustainable tourism investments
    • the European Union
    • tourism development

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